The year 2020 was a big roller coaster ride. Thanks to COVID-19, we’ve seen things we never thought were possible. The real estate market is no different, from record-low mortgage rates to short days on the market. It was one of the biggest surprises of the year. The market dipped in Spring which is usually the best time for home sales, but real estate showed its resiliency as soon as the situation got a little better. People still went out to buy homes despite the rising median prices and high unemployment rate. Curious to know how the US market performed in 2020? Let’s get to the stats!
Median Sold Price
The median sold price in the country reached $296,500, up from $271,900 in 2019 and $259,300 in 2018. That’s almost $40,000 of growth in equity in two years. This growth rate has also been the highest since the housing boom in 2005.
There were still way too few available homes on the market last year. The low supply wasn’t able to match the pent up demand due to reasons relating to COVID-19. People with little to no reasons to move continued to hold on to their homes. This greatly limited the inventory available. The high unemployment also hindered some people from moving, although the movement in the market is still astonishingly high! The stiff competition drove up prices because buyers tried to outbid each other in hopes of securing a new property.
Number of Homes Sold
Job losses and the precarious economy did not prevent buyers from hunting for homes and driving up sales. The numbers have jumped to a total of 5,640,000 in 2020. This is compared to 5,340,000 both in 2018 and 2019. The number of homes sold was significantly higher than the previous years despite the economic downturn. Home sales also performed at their highest level since 2006.
The pandemic still had an impact on people’s reasons for moving, driving up the number of homes sold even further. Homebuyers still opted to live in places that are more secure from the virus, avoiding city centers and prime locations with high foot traffic. Many buyers realized that the situation might not be better for a bit longer, affecting their reasons for moving.
Median Days on Market
Demand was still high, but the supply remained low; that’s why homes are now only on the market for 21 days! Homes took nearly double the time to sell in 2019 at 41 days. That’s a significant drop in the number of days on the market.
Due to the low inventory contrasted with extremely high demand, people made sure to close deals quickly. It was harder to choose a home that exactly fits someone’s criteria, that’s why people made it a priority to secure a property versus having nothing at all. Even homes that typically take longer to sell (e.g. needs repairs and appliance upgrades) still found new owners.
One of the most important drivers of the real estate market was the still record-low mortgage rates. More and more people wanted to purchase homes because the mortgage rates significantly increased their chances of buying a property they desired. The high prices still seemed affordable due to this. The low rate of around 3% combined with reasons to move due to the pandemic cemented the real estate market as one of the strongest anchors in the nation’s road to economic recovery.
That’s it for the national real estate market report for 2020. If you’re interested to learn what these stats mean in relation to your home buying or selling desires, just drop a message. Together, let us achieve your goals this brand new year!