Dwindling levels of inventory combined with pent-up buyer demand has led to continued home price increases. During the week ending Aug. 15, 2020, the U.S. median listing price increased 10.1 percent on an annual basis, the fastest pace of growth since January 2018, according to realtor.com’s Weekly Recovery Report.
New listings were down 11 percent, which caused a decline in realtor.com’s overall housing market recovery index of 0.9 points to 104.8.
Courtesy of realtor.com
The market recovery index is calculated through a weighted average of realtor.com search traffic, median list prices, new listings and median time on market and is compared to the January 2020 market trend as a baseline for market growth prior to the coronavirus outbreak. The January index is set to 100 as a baseline, and higher market indexes indicate higher recovery.
Javier Vivas | Photo credit: realtor.com
“With supply and demand moving in opposite directions, sellers are clearly gaining the upper hand in the market as buyer competition builds up and prices gain momentum going into the fall,” Javier Vivas, director of economic research for realtor.com said in a statement. “Buyers hoping to close on a home this year should expect some hot competition, especially if they are looking at more affordable or entry-level housing.”
With buyers far outpacing sellers in their return to the market, total inventory saw a decline of 36 percent year over year.
Increased competition for fewer listings also resulted in the time on market decreasing to four days faster than the same time last year.
Overall, the sellers market has yielded an increase in the housing demand growth index (which tracks growth in online search activity) by 3.3 points, an increase in the listing price growth index (which tracks growth in asking prices) of 0.2 points and a decline in the new supply growth index (which tracks growth of new listings) of 4.2 points, all on a week-over-week basis.
By region, the West has shown the strongest weekly growth in recovery and leads in recovery overall, according to realtor.com’s analysis. The South’s recovery dipped slightly this week, likely because of a decline in housing supply, the report noted.
Courtesy of realtor.com
“Per our earlier research, the spread of COVID-19 is closely linked to the housing slowdown, with markets with higher cases per capita more likely to see a bigger impact on supply and the pace of sales,” Vivas said. “The speed and sustainability of the reopening, and each market’s ability to contain COVID-19, are dictating the speed of recovery across the regions. Finally, resilient economies may have an edge in the housing recovery, and areas with strong job markets before COVID-19, especially those with thriving tech sectors, are seeing buyers and sellers reconnect faster than the rest of the country.”