December Makes 2020 a Blockbuster for Real Estate
According to the National Association of Realtors, hungry buyers continued to be driven into the arms of sellers when it came to existing home sales.
The total number of existing home sales in December increased over November 2020 but also drove the number of home sales to a record 5.64 million units.
These sales figures left all prior estimates in the dust; sales increased in December year-over-year by 22% on a national basis.
The concern that many real estate professionals had during the first and early part of the second quarter of 2020 regarding the pandemic’s impact on buyers appears to be erased.
Economists in the industry pondered that the number of purchases could have hit 8 million had the agents had more inventory to work with. Between the rush to buy homes in less densely populated regions and low mortgage rates, the industry saw some of the most lucrative profits made in decades.
Of course the big story is going to remain the inventory shortage that stands at just over 1 million homes available for sale nationwide, a 23% decrease from this time in 2019.
According to December metrics, the months supply of available inventory translates into 1.9 months worth of home sales.
The National Association of Realtors reported that the median price of an existing home sold in December hit approximately $310,000, a 12.9% increase over December 2019 and a record for the month of December.
Buyers and home flippers have clearly scooped up a large percentage of a supply of homes under $100,000. The number of homes sold below $100,000 fell by 15% in December year-over-year. The number of homes that sold between $500,000 and $750,000 skyrocketed by 65%.
It appears that first-time home buyers still are not making up a greater percentage of the number of home sales recorded, translating into just 31% of all total sales. According to the Association, first-time home buyers typically account for 40% of all home purchases. The final metric that reflects this torrid market is that nationally it required just 21 days for a home to sell once it was placed on the market in the month of December. This is another record.