To help you understand today’s market update, I’d like to share some insights from the National Association of Realtors’ chief economist Lawrence Yun. He was recently asked for his prognosis for the upcoming housing market based on how things have progressed so far in 2020. In response, he said:
“Cooler weather won’t chill the housing market’s rally, as strong existing home sales and record-high pending home sales in August indicate no homebuying slowdown [this] fall. Further, the striking market turnaround since the early days of the coronavirus pandemic has brought a resurgence in bidding wars and has proved housing’s resilience in an unusual and volatile year. […] But a mix of surging buyer demand and low inventory puts the industry in uncharted territory.”
“The median home price has soared to an all-time height of $300,000, threatening to choke off first-time buyers from the market and depress the national homeownership rate. More homebuilding is necessary to relieve some of the market pressures. New home sales hit more than 1,000,000 year to date in September—an encouraging sign. However, lumber shortages are pushing up new home prices by an average of $14,000 since April.”
So what does that mean for us locally?
Despite the pandemic, home sales in our region have kept pace with 2019. The continued lack of inventory puts upward pressure on home prices. Year to date, our median home price is up by 5.5% over last year. We have now experienced a year-over-year increase in median sold prices every month since March of 2016.
So what can we expect from the future?
Interest rates are likely to remain low, which will keep demand high. Despite the variables that the pandemic has thrown into the mix, housing stats remain aligned to the seasonal trends of previous years, which gives us insight into what we can possibly expect in the coming winter months.
If you have any questions about the market or how the conditions affect your buying and selling prospects, please reach out to us. We’d love to help you.