Spring has sprung, temperatures are rising and the housing market is smoldering. With baseball back, it seems apropos to note that housing activity in the 53 markets measured in the RE/MAX National Housing Report hit several notable milestones out of the park in March 2021: Median Sales Price, Months Supply of Inventory and Days on Market.
While year-over-year comparisons are skewed by the start of pandemic restrictions in mid-March 2020, the supply and demand imbalance has come to a head as more buyers engage in bidding wars, driving up sales prices with competitive offers. For the first time in the 13-year history of the report, the Median Sales Price pushed above $300,000.
"It's definitely a seller's market right now, and homes are selling at a feverish pitch, further crimping this historically low inventory situation," RE/MAX Holdings CEO Adam Contos says. "On average, homes that sold last month had been on the market just 38 days, nearly three weeks less than the March average of 59 days from the past four years."
The curveball here is that despite the complex situation, there’s real reason for optimism. (Most likely what Tom Hanks meant to say in “A League of Their Own” was, ‘There’s no crying in real estate.’)
New residential construction is rebounding after a winter weather slowdown and, as the pandemic recovery continues, more sellers may put their homes on the market – alleviating some of the inventory shortage.
So, what can buyers do in the meantime to achieve their dreams of homeownership while supply catches up to demand? Find an ace – and fast, says Contos (though not in those exact words): “New listings are coming onto the market, but because houses are selling so fast, the inventory total can't keep pace. The result is a constantly thinner range of options for buyers to consider. In many markets, buyers have to race to make an offer – often over listing price – to get the house they want, and that competition creates an attractive environment for sellers. It's tricky on both sides of the equation, and RE/MAX agents are using their industry-leading experience to help buyers and sellers achieve the best outcome."
There are key advantages to having a trusted, experienced real estate professional by your side especially during an imbalanced market.
Here’s a play-by-play of the latest data in the RE/MAX National Housing Report:
1. You Can’t Buy a Home for Peanuts
In March 2021, the median of all 53 metro Median Sales Prices was $303,000, up 4.5% from February 2021, and up 14.3% from March 2020. Only one metro area, Honolulu, HI, saw a 4.7% decrease year-over-year in Median Sales Price. Thirty-nine metro areas increased year-over-year by double-digit percentages, led by Boise, ID at 31.9%, Augusta, ME at 21.6%, and Pittsburgh, PA at 20.8%.
2. There Are No Extra Innings
The average Days on Market (the number of days between when a home is first listed in an MLS and a sales contract is signed) for homes sold in March 2021 was 38, down four days from the average in February 2021, and down 16 days from the average in March 2020. The metro areas with the lowest Days on Market were Salt Lake City, UT at 16, and a tie between Boise, ID and Seattle, WA at 17. The highest Days on Market averages were in Des Moines, IA at 94, Miami, FL at 90, and New York, NY at 84.
3. You’ve Got to Keep Swinging
Inventory dropped to a new report low for the ninth consecutive month and was 45.2% lower year over year. Average Months Supply of Inventory set a report record of 1.1, eclipsing the previous low of 1.7 months in February. For context, the figure for March 2020 was 3.2 months of available supply. A six-month supply indicates a market balanced equally between buyers and sellers. In March 2021, all 53 metro areas surveyed reported a months supply under six, which is typically considered a seller’s market. The markets with the lowest Months Supply of Inventory were a four-way tie between Albuquerque, NM, Denver, CO, Boise, ID, and Seattle, WA at 0.4.
Don’t let the fear of striking out keep you from playing the game! If you’re ready to take your turn at bat, contact The Kirk Simmon team today.