As the market navigates the “new normal” coming into 2021, there are no signs of buyer demand slowing down. Even with less inventory year-over-year, the market saw a 9 percent increase in closed sales for the month of January.
“As long as interest rates continue to remain low and inventory scarce, there will most likely be multiple buyers for appropriately priced homes. REALTORS® will continue to navigate Sellers through multiple offers with, ultimately, one contract being made while disappointing several others,” said GCAR President, Jeffrey Decatur, of Re/Max Capital.
A drop in the market inventory is both typical and expected in January; 2021’s number of homes for sale fell by 26 percent to 959 impacting the number of homes available for sale to decline by 42 percent to 2,690 units. Months’ supply of inventory was down 48.8 percent. As inventory goes, months of supply followed with a record low of 2.2 months. GCAR CEO, Laura Burns, commented, “Shadow or no shadow, spring is right around the corner so the timing is right for sellers to list and the new construction season to start revving up which will provide some relief to the pressure on inventory.” Last month new construction days on market dropped by 47 percent over January 2020 to 41 days on market.
Prices are reflecting the market with the median sales price on existing homes increasing 12 percent to $230,000 with the percent of original list price received at sale rising to 97 percent over last year and new construction rising to $383,925. Price increases are projected throughout 2021 given the high demand for a historically low number of homes available for sale and the strong increase in new construction materials.
Homebuyers would do well to prepare for a competitive season with lower inventory in the more affordable price categories and continued growth in list prices. Still, the current affordable interest rates will continue to offset and should enable buyers to get more house for their home-buying dollar.