The National Association of Realtors reported that sales for existing homes soared by over 44% year-over-year for May 2021. Approximately 5.8 million homes were sold, which is still above pre-pandemic levels.
The crisis in the inventory shortage nationwide continues to limit the number of existing home sales on a month-to-month basis. Buyers are still driving home prices higher to record levels, with the median price for an existing home hitting $350,000; this represents a 23.6% increase over the median price back in May 2020.
The good news is that there were over 1.23 million homes on the market in May, which is an increase from April 2021.
In April 2021 the number of new listings skyrocketed by over 110% in New Jersey, as compared with April 2020. In addition, the pending New Jersey sales for April also shot higher by 106%, reflecting the momentum of buyers driving home prices ever higher.
Some news sources erroneously report that sales for existing homes are falling on a month-to-month basis, but this is not accounting for the depletion of the available inventory. The days-on-market continues to shrink as bidding wars become the new normal. Inventory compared to 2020 has evaporated in some cases by over 55% in just 12 months.
The inventory shortage has virtually erased the entry-level homes segment, which range in price between $100,000 and $250,000, which fell in the month of May by 2% from May 2020. The shortage of existing homes for sale now is driving buyers into higher price ranges, with homes priced between $750,000 and $1 million jumping by 178%.
The low interest rates for mortgages and the shortage of available homes for sale is fueling buyers to pay up, considering the low mortgage rates. The fear that many buyers have is that the trajectory of this market still has a long way to go.
Currently the average 30-year fixed mortgage is in the 3% range, which is keeping buyers interested in whatever inventory is available.
Contractors are clearly unable to meet buyer demands with the number of newly built homes dropping in April by 6% from March 2021.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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