The coronavirus pandemic raised the temperature considerably on the nation’s housing market. The past year has been marked by soaring prices, logic-defying offers over asking price, and steep competition as sellers have been hesitant to put their homes up for sale.
But the heart-pumping, bank account–depleting housing market frenzy could die down—at least a little—in the coming months as more sellers list their properties and inventory slowly increases. About 10% of current homeowners plan to put their homes on the market this year—and more than half are more affordably priced, according to an exclusive survey conducted by realtor.com®. An additional 16% expect to list their properties within the next two to three years.
Typically, only about 8% of homeowners put their homes up for sale a year. This is about a 25% anticipated increase, which translates into about 1.5 million more homes. The increase may be due to folks holding off on selling their homes during the worst of the coronavirus pandemic.
“There is a brighter light at the end of the tunnel for many weary buyers,” says Realtor.com Senior Economist George Ratiu.“In a market that right now only has close to half a million listings, a big boost in inventory can mean more choices for buyers and potentially a slowdown in price growth,” says Ratiu. He was quick to add that prices won’t drop, but the double-digit growth may taper off. “It’s signaling a return to normal for the economy and the housing market.”
The March 2021 Market Report, released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), shows that March was the highest performing month in the 13 years NABOR has tracked these metrics.
Sellers are raising prices and multiple offers are still coming in,” said Budge Huskey, CEO, Premier Sotheby’s International Realty. “This is because inventory is limited, and more sellers are realizing now is a good time to place their home on the market and get top value in the current market conditions!”
Broker analysts predict the level of demand experienced in March is sustainable and should be expected to continue for the next few months, or longer. “Season was disrupted this year because many people elected to hold off relocating until they were fully vaccinated,” added Huskey. “Agents also report that many seasonal visitors are staying longer than in previous years, possibly because they can afford to wait in anticipation of more homes becoming available in the luxury market. I believe we’ll continue to see more newcomers from northern states looking for homes in the high end in the coming months. Beyond that, and as we enter the summer season, we might begin to see a second wave of international buyers entering our market as travel restrictions begin to relax.”
Median closed prices in March increased 12.2 percent to $415,000 (the highest median price increase month/month on record since 2008) from $370,000 in March 2020. In March 2021, there were just 1,819 homes in inventory (the lowest it has been since 2014), which was a 73.2 percent decrease from 6,795 homes in inventory in March 2020.
The March report revealed that the Naples area now has only a 1.6 month supply of homes available to buyers
The following charts give a visual summary of market activity: (more…)
This week’s drop below 3% – again – reminded me that the only one thing more fraught than commenting on mortgage rates is trying to predict where rates are headed. (see below for some of my posts about mortgage rates.)
After rising steadily from 2.65% at the beginning of the year to 3.18% by the end of March, the 30-year Fixed Rate Mortgage (FRM) has backed off again and this week the rate dropped back under 3%.
Here are the weekend’s Open Houses. Be aware that with such low inventory, many new listings receive offers before the weekend Open Houses.
This list will be updated on Sunday morning (because of the quirks of MLS many of the Sunday Open Houses don’t show up on Saturday.)
The U.S. housing market needs nearly 4 million single-family homes to meet the nation’s demand, according to a new analysis from Freddie Mac. The 3.8 million shortfall marks a 52% increase in the housing shortage since 2018.
“This is what you get when you underbuild for 10 years,” says Sam Khater, Freddie Mac’s chief economist. “We should have almost four million more housing units if we had kept up with demand the last few years.”
Lawrence Yun, chief economist of the National Association of REALTORS®, has been among real estate economists leading the calls over the last few years for greater inventory and more homebuilding to meet demand. “We need to build more homes,” Yun told NPR, adding that since the housing crisis more than a decade ago, homebuilders have been building too few homes.
The housing shortage mixed with strong buyer demand since the pandemic is prompting home prices to rise rapidly. The median existing-home price for all housing types in February was $313,000, up 15.8% compared to a year earlier, according to the National Association of REALTORS®.
1. The median price of the SFHs sold in Q1 2021 increased 5.6% to $599,000, but this compared with $630,000 for the whole of 2020.
2. Without sales at Fisherman’s Watch – which occurred in Q1 2020 at prices between $724,900 and $1.25 million -the median price of the Condos sold dropped back to $415,000, more in line with the figure from Q2 to Q4 in 2020.
3. SFH sales have been volatile in the last 3 years: 14 in Q1 2019, 30 in 2020 and back to 15 in Q1 2021. Condo sales ticked up from 16 to 17, but with a very different mix.
1. The median price of Single Family Homes (SFH) sold in Q1 2021 increased 14.4% to $527,410, only the second time a Quarterly price has exceeded $500,000.
2. The median price of the Condos sold increased 11.7% to $405,000, breaking $400,000 for the first time, although the median price in the second half of 2020 was close – $395,000.
3. Sales of SFH were sharply lower at 30 vs 42 and compared with a 5-year average of 37. Condo sales increased to 74 from 68, slightly above the 5-year average of 70.
4. 70% of both SFHs and Condos sold in Q1 2021 received an accepted offer in 15 days or less.
1. The median price of the Single Family Homes (SFH) sold in Q1 2021 increased 14.9% to $575,500 from the Q1 2020 figure of $501,000, which was by far the lowest number in 2020.
2. With no new major developments, the median Condo price dropped 5.3%% from $375,000 to $355,000, which was in line with the median price for the whole of 2020.
3. SFH sales increased from 41 to 44, in line with the 5-year average, while Condo sales jumped from 23 to 35.
4. 77% of SFHs and 69% of Condos sold received accepted offers in 15 days or less
The median price of Single Family Homes (SFH) sold in Q1 2021 increased 10.5% to $765,000, well below the $839,900 in the second half of 2020. But Q1 can often be an anomaly because of the small number of sales.
SFH sales were 32 compared with 31 in 2020.
There were just 10 Condo sales in Q1 2021, compared with 9 in Q1 2020. Condo sales occurred between $260,000 and $599,000. 6 of the 2021 sales occurred below list price, 2 at list and 2 above list price.