As buyers have flooded the market in droves in an attempt to find their ideal home while sheltering in place during the pandemic, inventory has continued to decline while median sales prices have inched upwards.
Based on an analysis of data from 2018 through 2020, real estate technology solutions company Homesnap has released market predictions for 2021 suggesting that homebuying demand will remain hot and inventory will continue to decline — unless sellers can become enticed enough by rising prices to reenter the market.
Homesnap’s analysis shows that homeselling continues to outpace the number of new listings brought to the market each month. In October 2020, there was only a 0.22 percent increase in the total number of new listings year over year. In contrast, the number of total sales increased 19.29 percent year over year.
As a result of overwhelming homebuyer demand, home prices have continued to rise over the past several months. The average sold close price (a figure Homesnap identifies as the average list price for properties that have sold) increased a whopping 6.7 percent between September 2020 and October 2020.
Moving into 2021, Homesnap anticipates that market demand will continue to be strong and follow the traditional increase in activity that comes with the spring season. However, that activity can only remain strong as long as there is ample inventory to support it, which remains uncertain. Still, with prices on the rise, it’s possible more sellers will be drawn to market with the promise of earning a bit more on the sale than they may have otherwise expected.
“As median home prices continue to soar, homeowners who may have been interested in selling in the next three to five years may list their homes sooner, freeing up more inventory,” Homesnap’s report reads.
And as buyers continue to move away from cities to more spacious and suburban areas, Homesnap foresees those markets staying competitive in the new year as well.
With these factors in mind, Homesnap Founder Guy Wolcott advised homebuyers to be flexible in their search, be realistic about their budget and to continue to review new listings as soon as they appear.
“To land a home in a competitive market, you need to be ready to make a decision quickly,” Wolcott said. “Decide in advance which features you are willing to compromise on so that you can be as flexible as possible when it comes to moving forward with a property. Waiting days to make a decision may take you out of the running. Act decisively, with your agent’s counsel.”
On Monday, CoStar Group announced a $250 million acquisition of Homesnap that’s expected to close by the end of 2020.