Sales Surge by Over 20% as Homes Sell a Week Faster than a Year Ago
According to the RE/MAX National Housing Report for September 2020, the streak of record-shattering home sales stretched to three months in September, as closings rose 21.1% from a year ago. On average, homes sold in a mere 39 days–a full week faster than in September 2019.
Meanwhile, inventory plummeted 31.9% year over year as the number of homes on the market dropped to an all-time low in the 13-year history of the report.
Delayed by pandemic-related lockdowns, summer’s peak homebuying season pushed into fall. September sales were only 3.3% lower than August’s, while the average seasonal August-to-September drop-off over the previous five years was 15.3%.
“September’s massive year-over-year increase in home sales was the latest reminder of the housing market’s overall strength and resiliency,” said Adam Contos, CEO of RE/MAX Holdings, Inc. “Demand is off the charts right now. Buyers of all ages are coming into the market determined to improve their quality of life through amenities, community and the unique security that comes with homeownership. They’re working through the challenges of tight inventory, high prices and competing offers to take advantage of historically low interest rates and, in many cases, the greater mobility they now enjoy through working remote.”
Home Prices Soared 14% in September, a Record-Setting Month
The national median home price rose 14.4% year over year to $333,900 in September, the biggest annual increase of any month since at least 2012, according to a new report from Redfin. Prices continue to rise due to record-low mortgage rates, a historic shortage of housing supply, and pandemic-driven demand for spacious homes.
“2020 will be known for a lot of things and a record-breaking year for real estate will certainly be one of its more unexpected legacies,” said Redfin chief economist Daryl Fairweather. “Demand typically abates in late summer and early fall, but seasonal patterns don’t stand a chance against the other factors motivating homebuyers this year. Homebuyers are seeking spacious homes in areas outside big cities to accommodate homeschooling and remote work. That plus low mortgage rates and record-low inventory are fueling historically high price growth and the fastest market in recent history.”
Median prices increased year over year in every single one of the 87 largest metro areas Redfin tracks. Bridgeport, CT (+33.1%) and Memphis, TN (+29.7%) had the biggest annual increases for the second month in a row, followed by Philadelphia (+23.6%). Honolulu saw the smallest increase, though prices were still up by a strong 5.3% year over year, followed by Milwaukee (+6.1%) and Baton Rouge (+6.2%).
Home Values are Growing at a Pace Not Seen Since the Recovery From the Great Recession
The housing market has seen record-breaking growth since June, further cementing its strength amid an uncertain economy, according to the latest Zillow Real Estate Market Report.
The typical home value rose to $259,906 in September. That incredible growth includes:
A month-over-month growth rate of 0.8%, the biggest jump since November 2005.
Quarterly growth of 2.2%, the largest increase since 2013.
Annual growth of 5.8%, the largest in nearly two years.
Add to that recent data showing double-digit annual growth in both list and sale prices and a clear picture emerges, showing how this summer’s extreme lack of inventory and incredible demand have stoked the flames of a hot housing market to impressive new heights. Zillow’s updated forecast expecting 7% growth in the coming year shows that heat will continue for some time.
“Home values are accelerating more quickly than any time since 2014, marking a sharp turnaround from a market briefly put on hold during the outbreak of the pandemic this spring,” said Zillow senior economist Jeff Tucker. “The historic shortage of homes available for sale has boosted home price appreciation, now that buyers are waging bidding wars for the few options left. Builders are racing to fill the gap, and we may see more listings next year if nervous sellers become reassured, but this shortage of homes is so deep that any reversal would take at least several months.”
For the third consecutive month, home values have risen in every major U.S. metro compared to the month prior. September increases ranged from 0.5% in Orlando to 1.5% in San Jose. Yearly growth was fastest in Phoenix, where home values were up 11.7% since this time in 2019. San Jose was hot on its heels at 11.5%, and Seattle stayed in third, hitting double digit growth (10.7%) for the first time since August 2018.
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