Real Estate: A Look at the Market 1 Year Ago vs. Now
The COVID-19 pandemic has caused real estate prices to soar in many parts of the country. A major seller’s market, home prices have risen as buyers vie for the notably fewer homes available than last year at this time.
GOBankingRates conducted research to gauge how much the market has changed in the past year — and the results were pretty remarkable. Here’s a look at how the pandemic has impacted real estate.
In 2019, the typical value for all homes was $245,517. This rose 8.39% to $266,104 in 2020.
This closely aligned with the average value for single-family residences, which soared from $244,274 in 2019 to $265,109 in 2020 — an 8.53% increase.
No doubt, rising real estate values were closely tied to a 26.62% decline in inventory for all homes. Specifically, the for-sale inventory for all homes was 1.56 million in 2019, which plummeted to 1.1 million in 2020.
This decline was even more prevalent among single-family residences, which tumbled from 1.4 million in 2019 to 966,136 in 2020 — a 30.34% drop.
Not surprisingly, the median number of days for a property to hit pending on home listings also saw a drastic 60% decline. This went from 35 days in 2019 to 14 days in 2020, as buyers scurried to put down roots.
List prices saw a notable rise from 2019 to 2020.
The median list price for all homes rose from $303,267 in 2019 to $337,964 in 2020 — an 11.44% increase. Single-family residences realized a similar, yet slightly smaller 10.22% surge, going from $302,330 in 2019 to $333,217 in 2020.
Given these market conditions, you might imagine most homes were sold above list price, but that wasn’t the case. However, the median sales price did rise considerably from 2019 to 2020.
In 2019, the median sales price for all homes was $259,000. This climbed 12.74% to $292,000 in 2020.
In a similar pattern for single-family residences, the median sales price went from $263,256 in 2019 to $297,003 in 2020 — a 12.82% boost.
Despite the competitive market, some sellers were still forced to slash the price of their properties. Of course, fewer homeowners had this issue in 2020 than the previous year.
The share of all home listings with a price cut declined 20.19%, falling from 13.77% in 2019 to 10.99% in 2020. Numbers were very similar for single-family residences, which had 22.13% fewer price cuts in 2020 than 2019. Specifically, 13.96% of these listings endured a price cut in 2019, compared with 10.87% in 2020.
Interestingly, homes that had a price cut ultimately offered deeper discounts in 2020 than 2019. Breaking it down, the median price cut for all homes in 2019 was $5,657. This surged 57.93% to $8,934 in 2020.
The price cut situation was slightly more extreme for single-family residences, which had a median of $5,534 in 2019, rising to $9,003 in 2020 — a 62.70% increase.
One of the main drivers of the pandemic real estate boom, mortgage rates tumbled to all-time lows. Buyers’ strong desire to purchase a property, combined with notably low inventory, created the ultimate sellers’ market.
In 2019, the 30-year fixed-rate mortgage averaged 3.19%. This plunged 31.97% to an average of 2.17% in 2020.
Nearly the same, the average 15-year fixed-rate mortgage saw a 28.61% decline from 2019 to 2020. Rates averaged 3.74% in 2019, but in 2020, averaged just 2.67%.
Clearly, if you’re thinking about selling your home, now is a great time to do it.
While it’s definitely a seller’s market, don’t be discouraged if you’re on the other side and planning to buy a property. Go into the process with a solid budget intact, and just know it might take a little longer than expected to get under contract — but it will happen.
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Methodology: For this SUPPORT piece, GOBankingRates used Zillow and the Federal Reserve Bank of St. Louis to find 22 different data points that represent change across the real estate market over the last year. GOBankingRates found both (1) December 2019 and (2) December 2020 data points for each category and (3) the raw figure change from 2019 to 2020 as well as the (4) percent change from 2019 to 2020. All data was collected on and up to date as of Feb. 3, 2021.