TGFLIP Marketing
Aug 6, 20214 min
Location Matters: Analyzing Real Estate Markets.
TGFLIP MARKETING AGENCY
August 6th 2021
Content:
Quick Update
Median Sales Price of Homes
Active Listings of Home for Sale
Days on Market
Key Takeaways
1. Quick Update
"Over 4% of homes for sale had price drops, and pending sales are down more than 10% from their 2021 peak."
[Source]
The highly competitive real estate market is cooling down eventually, as several factors are dropping down exponentially. One of those factors is the median days that a property remains on the market presenting a drop-down to a record level of just 15 days! Yes, just 15 days!
A 4% drop in the price of weekly share homes for sale is an indicator of the direction of the upcoming market. Similarly, asking prices have also shown a constant since May. However, among these pushing pointers, the sellers are still in charge as home value continues to peak up, showing a 20% increase compared to last year. [Source]
The aftermath of COVID-19 in the US real estate industry produces a low inventory, high demand market. This high demand further causes an instant rise in the prices of homes. Fewer homes were getting listed and the ones that were listed already had a high number of bids. (You can find more about "low inventory, high demand" here)
2. Median Sales Price of Homes
The home prices in the US experience a steady state between 2017 and 2019. As COVID-19 surges the world, this constant price graph encounters a sudden increase. The home prices continue to rise to date favoring the sellers.
"According to Statista, the average sales price of a new home in 2020 was 389,400 U.S. dollars and in 2021, it reached 408,800 U.S. dollars!"
[Source]
As mentioned earlier, this increase represents the high-demand market. Keeping in mind, the number of home sales financed through a mortgage jumped from 470,000 to 561,000! [Source]
Data Source: Fred Economic Data
As you can observe in the above graph, the median home sales price for the first and second quarters of 2021 shows a huge rise as compared to 2019 and 2020.
3. Active Listings of Home for Sale
Active listings of homes for sale indicate the number of homes listed for sale at any particular time. The low inventory, high demand market caused by COVID-19 caused a swift decrease in the active listing of homes. This decreasing trend continues its way through 2021 however, graphical analysis shows a small comeback in the past couple of months.
Data Source: Fred Economic Data
Referring to the graph, the active listings of homes for sale were at their peak in mid-2019. But the peak soon turned into a continual drop in the listing leading variably to 2021.
4. Days on Market
COVID-19 pushed the real estate industry to equip digitalization. Turning on-site visits onto virtual tours, providing the feature to home buyers to check out the property while sitting on their couch. However, this easiness comes with many doubts, defects, and compromises. The Virtual tours are not 100% perfect and this puts buyers in a stage of uncertainty. This uncertainty was explicitly visible through the number of days homes have to wait on the market.
Due to a reduction in COVID-19 restrictions, the on-site availability is improving. This allows homebuyers to check out the whole property and clear any doubts. The transformation of the real estate industry into a digital industry has streamlined the whole buying process for buyers.
Data Source: Fred Economic Data
Through the attached graph you can observe the drastic drop-down in the number of days a home stays on the market. Comparing it to the stats of 2019 and 2020 shows that the whole buying process has accelerated. This gain acceleration is mostly because of how easily a home can be accessed online with all its details.
5. Key Takeaways
"The median home-sale price increased 21% year over year to $365,500, a record high." [Source]
"The asking prices of newly listed homes were up 12% from the same time a year ago to a median of $361,700. This is up 0.5% from the four-week period ending July 4, but down 0.6% from the all-time high two weeks ago." [Source]
"Pending home sales were up 11% year over year, the smallest increase since the four-week period ending July 5, 2020. Pending sales were down 11% from their 2021 peak during the four-week period ending May 30, compared to a 4% decrease over the same period in 2019." [Source]
"New listings of homes for sale were up 3% from a year earlier. The number of homes being listed is in a typical seasonal decline, down 8% from the 2021 peak during the four-week period ending May 23, compared to an 11% decline over the same period in 2019." [Source]
"53% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 44% rate during the same period a year ago, but down 4.2 percentage points from the high point of the year, set during the four-week period ending March 28." [Source]
"38% of homes that went under contract had an accepted offer within one week of hitting the market, up from 32% during the same period a year earlier, but down 5.1 percentage points from the high point of the year, set during the four-week period ending March 28." [Source]