In a recent article published by the National Association of Realtors, it was reported that July home sales climbed 24.7%, leaving June’s 20.7% increase in the dust. A strong June and July is making for an optimistic outlook on the future of the real estate market, which many believe is quickly recovering, and will continue to be strong throughout the remainder of 2020 and into the new year.
Some of the rapid growth can be attributed to shifts caused by the pandemic. Many organizations made the quick shift to moving employees offsite and working remotely. “With the sizable shift in remote work, current homeowners are looking for larger homes—and this will lead to a secondary level of demand, even into 2021,” says NAR Chief Economist Lawrence Yun.
Remote work comes with its own unique challenges—one of which is attributed to space. With more time being spent at home, varying degrees of shelter in place orders still being in effect, and families adjusting to distance learning, there is an increased demand for additional spaces within a home. Dedicated offices spaces, Zoom friendly rooms, better outdoor spaces and swimming pools are just a few of the requests high on the wish lists of buyers purchasing during the Covid-19 era. Homes featuring these spaces are not likely to last long in the current market.
As of July, the national median price of an existing home hit $304,100 for the first time ever, according to NAR. A combination of increased buyer demand, low interest rates, and minimal inventory has led to this sharp increase, but will it sustain?
Homes spent an average of 22 days on market in July, which is down 8.7% from the month of June in which homes spent an average of 24 days on market. This trend confirms the fact that demand has increased.
At the end of July, NAR’s housing report indicated that the number of available units totaled 1.5 million, which is a 21.1% decrease from last year. According to Yun, “The number of new listings is increasing, but they are quickly taken out of the market from heavy buyer competition,” Yun goes on to state that, “More homes need to be built.”