Despite a rather unpredictable year, housing demand is one area that has remained strong. Now, Redfin CEO, Glenn Kelman, predicts, “This level of demand is absolutely insane. I would expect it to last into 2021, at least.” Starting there, let’s take a look at what the recent data has to tell us.
Several factors driving demand – A rise in remote working. The desire to be in less-populated areas. Wanting more space to work and learn from home. All of these have contributed to an insatiable demand for housing.
Rates still at historic lows – Although they certainly won’t be forever, low interest rates are another factor fueling an already red-hot market.
The proof is in the purchasing – To help put existing demand in perspective, here’s the latest. In September, the National Association of REALTORS® reported sales of existing homes jumped 9.4%, up 20.9% annually.
Home prices also on the rise – A surge in demand, coupled with an ongoing inventory shortage, has created the perfect storm for a price increase to occur. By the end of September, the median ‘sold’ price was $311,800 (14.8% higher than this time last year). Not surprisingly, supply thins out (and prices are rising the fastest) the closer you get to the low end of the market.
The bottom line is this: There’s a lot to be excited about for real estate as we move into 2021. However, with prices continuing to rise, clients who are actively looking to buy may benefit from doing so sooner rather than later if their current situation allows.