The 2020 housing market has been very interesting. As of now, the market remains a hot seller’s market, with annual price growth hitting record highs as inventory continue to plunge. All through the pandemic-induced housing market, homebuyers have been looking for hints of a slowdown in the real estate market that has been a beehive of activities since the economic recovery began. As of now, there is a dire need for new home supply to boost the inventory and slowdown the skyrocketing home prices.
Asking prices for homes across the country continue to soar higher in double digits with the first week of November marking the 13th consecutive week of double-digit price increase this year. This upward trend of home values shows the strength of the housing market is as it was during the housing bubble. The strength of the US housing market is majorly attributed to the current all-time low mortgage rates, along with low inventory accompanied with high demand.
According to Zillow, seasonally adjusted home values are expected to increase by 2.9% between September and the end of 2020, and incline 7% in the 12 months ending in September 2021. According to Yun, NAR’s chief economist, home prices will likely appreciate 4% in 2020, before moderating to 3% in 2021 as more new supply reaches the market.
As of November 7, weekly housing market trends revealed that median listing prices are still growing at 12.9% from last year, marking the 13th consecutive week of double-digit growth in asking prices. The value of a typical homes for sale remained unchanged at $350,000.
In the week ending on November 7, new properties listed for sale dropped 12%, representing the second week of huge declines. This setback could be attributed to the increasing COVID-19 new cases. Moreover, the total active listings declined 39% after 5 consecutive weeks at 38%.
Elsewhere, time on the market for a listing is 13 days faster from last year. The rapid turnover reveals the faster than usual speed of home sales despite the usually slower season.
Will housing market crash or rise in 2021?
According to Noradarealestate.com, the US housing market is “far from crashing in 2020 or 2021.” In fact, the housing market continues to be at the frontline of the country’s economic recovery. The current economic situation resembles a “swoosh” pattern, with the initial impact lockdown due to the pandemic, followed by a gradual recovery as the economy slowly reopens.
In case of a second wave of the COVID-19 pandemic resulting in another shutdown, the “double-dip” or a W-shaped recovery is a possible result. There would be another decline in housing activities then followed by a period of gradual recovery.
Elsewhere, the Housing Market Recovery Index dropped to 108.0 countrywide for the week ending November 7, down 1.4 points from the previous week, according to Realtor.com’ latest recovery report. The decline comes as everyone turned their attention to the 2020 polls.
For the week ending November 14, the housing demand index dropped for the third consecutive week to 113.3, down 6.5 points from the previous week. This shows that the demand-supply imbalance continues to shorten. Although the housing demand is still very high, its rate is expected slow down in the next few months before it surges back in Spring 2021.
On the same week, the housing supply index also fell for the second consecutive week to 95.9, down 2.7 points from the previous week. As of now, it’s not clear whether sellers will continue to list properties during winter or they will withdraw once again with the rising COVID-19 cases and the approaching festive holidays.
From all the Realtor.com indexes, it’s clear that things are headed towards a balanced real estate market. Therefore, Realtor.com doesn’t foresee any housing market crash in 2021. With mortgage rates expected to remain historically low, 2021 is still going to be a good time to buy real estate.
Where your money should be at.
If you’re looking to buy real estate, it is best if you buy it from the best and hottest real estate markets. According to Realtor.com’s Market Hotness Index, which measures time-on-the-market and listing views per property, the east coast accounts for most of the top ten zip codes, which are as follows:
The 2020 Hottest ZIP Codes in America by Realtor.com
|Rank||Zip code||Zip Name||Views per property Y/Y (%)||Median days on market||Median listing price ($)|
|1||80911||Colorado Springs, CO||38||13||287,000|
|5||4106||South Portland, ME||5||21||377,000|
The Power Is Now, continues to keep you updated with the latest news in the real estate market, as we strive for advocacy of homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. In this regard, we have a team of professional realtors— VIP Agents stationed nationwide to help you with anything you need in attaining your homeownership dreams. You can get in touch with the VIP Agents at https://thepowerisnow.com/vipagent/. If you can’t find an agent from your area, you can contact me directly for a referral. Also, ensure you stay updated with any developing real estate market news by regularly checking our blog page at https://thepowerisnow.com/blog/. You can also set up an appointment to speak directly to me at https://calendly.com/ericfrazier.
Disclaimer: The views and opinions of Eric Lawrence Frazier are his own and do not necessarily represent First Bank or any organization affiliated with Eric Lawrence Frazier, or the Power Is Now Media Inc. First Bank is an Equal Credit Opportunity Lender. Eric Lawrence Frazier, MBA, is also a Vice President and Mortgage Advisor with First Bank. NMLS#461807 and a California Licensed Real Estate Broker DRE# 01143482. Email: Eric.email@example.com. Ph: 714- 475-8629.
Eric Lawrence Frazier
President and CEO
The Power Is Now Media Inc.