Even prior to the pandemic, housing inventory had hit record lows, and the problem has only gotten worse as demand continues to rise. Total home sales are outpacing new listings by a wide margin every month, and real estate tech company Homesnap foresees the shortage continuing in 2021 unless more sellers enter the market.
The divide between supply and demand is striking: compared to last year, total new listings increased .22%, while total sales increased 19.29%. Homesnap said this trend could further drain inventory as 2021 approaches.
Home prices have risen as a result of the mismatch in homebuyer demand and housing inventory. The average list price for properties that sold rose 6.7% from September to October this year, which Homesnap said is significantly higher than the same figure in 2018 and 2019.
As median home prices keep rising, homeowners who originally planned to sell within the next three to five years might list their homes sooner, Homesnap said, freeing up more inventory.
Homesnap predicts that even hampered by low inventory, the housing market will remain competitive in 2021, leading into a strong traditional spring home-buying season. Popular places to buy continue to evolve, with Homesnap agents reporting more homebuyers are searching in rural areas outside major city limits because they aren’t commuting to the office anymore and are looking for more space.
Guy Wolcott, founder of Homesnap, says buyers need to be realistic about their budgets, stay on top of new listings and be prepared to make quick decisions, especially in a competitive market.