It’s safe to say the real estate market endured through the ongoing pandemic. Considering everything, the market came out with record and unexpected numbers leaving experts in awe. Here are some key real estate stats to wrap up a crazy year.
Highest December Ever for Pending Home Sales
What measures signed contracts on existing homes? The answer is pending home sales. This was completely flat in December, but it was the highest December reading ever. Typically, pending home sales start to slow down throughout the year. Amazingly, pending sales have still managed to make it up 21 percent. This is unexpected after facing record low inventory levels as low as 23% compared to 2019.
Source: MBS Highway.
New Home Sales Up 1.6%
Signed contracts on new homes are measured by new home sales. These sales made it up 1.6 percent in December. Unfortunately, this number came lower than expected. But, sales continue to stay up over 15% year after year. Also, sold homes that have not been entirely built yet are up 33% year after year. Note that the median home price for 2020 is $355,900. This is up 8 percent.
Residential Construction On the Rise
Housing starts were expected to have a 0.8 percent gain, but expectations were exceeded when they rose up 5.8 percent. Single-family starts were up 12 percent and 28%, year over year. This assisted with the limited inventory issue as many homes were contracted but not yet built. Permit acquisition rose 4.5 percent in December and 28 percent in total for the year. But, single-family permits were up 30% compared to the previous year.
Existing Home Sales
Existing home sales were up 0.7 percent in December 2020. This was a shock because this number was expected to drop by 2 percent, not rise. In December, record levels of low inventory were recorded. 1.08 million homes were up for sale compared to 1.28 million in November. The average time a home remained on the market was 21 days and foot traffic was up 24% from the previous year.
Home Prices Continue to Rise
The House Price Index is released by the Federal Housing Finance Agency and measures home price appreciation on single-family homes with loans against them. Supply is the tightest on lower-priced homes where the demand is the strongest. The cost of homes has risen 11 percent compared to the previous year.
Consumer Enthusiasm at All Time High
The CIti Panic/Euphoria index is reaching levels above any standard in history. It reached1.83 in a week in December and then 1.28 the week before. Note, anything above .41 is considered euphoria and now it is at 2.01. This is nearly 5 times that threshold. Knowing this, it is likely that Stocks need to gear up for a pullback. As a result more money could enter the Bond market causing MBS prices to rise and rates to decrease.
There’s a lot that has happened in the market and this year may blow expectations out of the water, too. If you plan on buying or selling, it’s important to monitor these stats to helo you make the best decisions at the right times. It helps to Speak with a professional to ensure you are doing right for your situation.