Strong December Home Sales, Big Second Half of 2020 Set the Stage for Potentially Historic 2021
December home sales increased 6.2% over November and 21.9% year-over-year, capping a record-breaking second half of 2020 that set new overall monthly benchmarks for most sales, highest price, lowest inventory and quickest closings.
Although December is typically a month with fewer sales, December 2020 ranked 5th in highest number of home sales for the year – and its sales exceeded all but two months of 2019.
“The very strong sales total in December – over 20% higher than a year earlier – reflects just how frenzied the market was as we entered 2021. And when you look at the entire last half of the year, you see sky-high demand for housing across the country,” said Adam Contos, CEO of RE/MAX Holdings, Inc. “Buyers are dismissing the potential constraints of rising prices and limited inventory to boldly move ahead with their plans to purchase and own a home. We think that says a lot about the lasting appeal of homeownership.
“Many people want to own their home, not rent, and the low interest rate environment is helping them do it. We expect to see more sellers enter the market this year as they take advantage of the favorable conditions and the greater mobility of working remotely. That, along with gains in construction, would help create more options for buyers, leading to what could be a very big year for sales.”
Down 17.9% from November 2020 and 33.0% from December 2019, December 2020 established a record low for inventory in the 13-year history of the report. It also set multiple new December records:
- Average Days on Market of 37, over two weeks less than the 53 days a year ago.
- Median Sales Price of $290,000 – up 9.4% year-over-year.
- Months of Supply of Inventory at 1.8, which was less than half of December 2019’s 3.9.
After the pandemic’s initial impact on the housing market last spring and early summer, 2020 ultimately posted a number of highlights in the report’s history:
- Home Sales: 5 of the top 10 months of sales since 2008 occurred in 2020 – July (the new record), August, September, October and December
- Inventory: 7 of the top 10 months with the lowest inventory; August through December became the five lowest months in report history, with each month’s inventory lower than the previous month’s
- Days on Market: 5 of the top 10 months with the report’s fewest Days on Market; September through December comprise the four months with the fastest average time for listing to sale
- Median Sales Price: 9 of the top 10 months with the highest Median Sales Price; at $290,000, August, November and December tied with the highest mark in report history
Highlights and the local markets leading various metrics for December 2020 include:
Of the 53 metro areas surveyed in December 2020, the overall average number of home sales is up 6.2% compared to November 2020, and up 21.9% compared to December 2019. Leading the year-over-year sales percentage increase were Los Angeles, CA at +42.7%, New York, NY at +40.6%, and Hartford, CT at +39.0%.
Median Sales Price – Median of 53 metro median prices
In December 2020, the median of all 53 metro Median Sales Prices was $290,000, flat from November 2020, and up 9.4% from December 2019. None of the metro areas saw a year-over-year decrease in Median Sales Price. Thirty-six metro areas increased year-over-year by double-digit percentages, led by Augusta, ME at +26.6%, Boise, ID at +23.8%, and Detroit, MI at +19.2%.
Days on Market – Average of 53 metro areas
The average Days on Market for homes sold in December 2020 was 37, up one day from the average in November 2020 and down 16 days from the average in December 2019. The metro areas with the lowest Days on Market were Omaha, NE at 17, and a two-way tie between Boise, ID and Cincinnati, OH at 19. The highest Days on Market averages were in Des Moines, IA at 93, Miami, FL at 84, and New York, NY at 71. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.
Months Supply of Inventory – Average of 53 metro areas
The number of homes for sale in December 2020 was down 17.9% from November 2020 and down 33.0% from December 2019. Based on the rate of home sales in December 2020, the Months Supply of Inventory decreased to 1.8 compared to 2.1 in November 2020 and decreased compared to 3.9 in December 2019. A six months supply indicates a market balanced equally between buyers and sellers. In December 2020, of the 53 metro areas surveyed, two metro areas, Miami, FL and Indianapolis, IN reported a months supply at or over six, which is typically considered a buyer’s market. The markets with the lowest Months Supply of Inventory were a two-way tie between Albuquerque, NM and Boise, ID at 0.6, and Salt Lake City, UT at 0.7.