Buyer Demand Escalates as Inventory Hits Unsurpassed Low

Realtor.com’s December Monthly Housing Trends Report revealed buyer demand is still increasingly high with homes for sale hitting an all-time low of below 700,000 across the nation creating intense bidding wars for all available homes.

The shortage of inventory has been an ongoing issue since early 2019, but December 2020’s low inventory is the result of a typical sluggish holiday inventory along with a pandemic buyer frenzy that evolved into a historic low housing inventory. Until a surplus of inventory is seen on the market, expect finding a home to be very challenging regardless of the buyer price range.  

December 2020 recorded close to 450,000 fewer homes listed compared to December 2019, according to realtor.com Cities with the largest declines in new listings were Nashville, Memphis, and Charlotte (North Carolina). While San Jose, California (up 123.8%) and San Francisco, California (up 98.9%) experienced notable increases in listings.

While inventory across the nation saw a huge decline, list prices steadily increased. Compared to December 2019, December 2020's median list price jumped 13.4% to $340,000. Cities seeing the largest increase in listing price were Austin (Texas), Riverside (California), and New Orleans. 

Northern Virginia Housing Market Update

Typically, December is a month that experiences fewer listings than the rest of the year. The holidays are upon us, and it is generally a time where prospective sellers ponder the idea of selling their property in the spring. However, this year Northern Virginians didn’t miss a beat. New listings continued trending from fall into the holiday season. The month of December saw 1,995 homes close in northern Virginia, which was a 28% increase compared to December 2019. Along with that, new listings soared 53% higher than in December of last year with 1,367 homes joining the bustling market. 

With an accumulation of high demand beginning with the infancy of the COVID-19 pandemic along with historically low-interest rates and a strong stock market, Northern Virginia saw a 19% increase in the total number of homes available in comparison to this time last year. In addition, the number of new pending contracts rose 45% above pending contracts in December 2019. 

Home sales activity for Arlington and Fairfax counties experienced a 28.2% increase above December 2019. The only number that fell in the Northern Virginia housing market was the average days on market. December 2020 ended with an average of 21 days, a 30% decrease compared to December 2019 where the average was 30 days on the market. 

With an incredibly high demand for homes, the market reflects a higher average sales price. The median sales price of homes in December 2020 rose 4.74% to $641,789 from $554,000 in the prior year. The forecast predicts no slowing down for this vibrant market at least through the first quarter of 2021.

Conclusion

With an increasing demand for inventory across the nation, expect bidding wars and higher listing prices to continue well into 2021 making this an unequivocally opportune time for sellers to list their property.