Homebuyer Demand and Traffic Is Far Above Last Year’s Pace – Nationwide and in South Florida
Homebuying has been on the rise over the past few months, with record-breaking sales powering through the market in June and July. Buyers are actively purchasing homes, and the momentum is continuing into the fall. It is, however, becoming harder for buyers to find homes to purchase. If you’ve been thinking about selling your house, the coming weeks might just be the timing you’ve been waiting for.
According to the Pending Home Sales Report from the National Association of Realtors (NAR):
“Pending home sales in July achieved another month of positive contract activity, marking three consecutive months of growth.
The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 5.9% to 122.1 in July. Year-over-year, contract signings rose 15.5%. An index of 100 is equal to the level of contract activity in 2001.”
This means that for the past several months, buyers have signed an increasing number of contracts to purchase homes – well above where the market was at this time last year. Lawrence Yun, Chief Economist at NAR notes:
“We are witnessing a true V-shaped sales recovery as homebuyers continue their strong return to the housing market…Home sellers are seeing their homes go under contract in record time, with nine new contracts for every 10 new listings.”
Below is a graph that shows the impressive recovery of homes sales compared to previous years. The deep blue v marks the slowdown from this spring that turned into an exponential jump in sales that followed through the summer, skyrocketing above years past:
What Does This Mean for Sellers?
If you were thinking about putting your house on the market in the spring, but decided to wait due to the health crisis, it may be time to make your move. Buyers are in the market right now. With so few homes available to purchase, homeowners today are experiencing more bidding wars, creating an optimal time to sell.
Is This Trend Going to Continue?
As CNBC notes in their article of July Pending Home Sales Jump over 15% Annually, there are no signs of slowing buyer demand this fall:
“The usual summer slowdown in the housing market is not happening this year. Buyers continue to show strong demand, spurred by the new stay-at-home world of the coronavirus and by record low mortgage rates.”
Danielle Hale, Chief Economist at realtor.com, concurred in her Weekly Housing Trends of Data for the Week of August 22, 2020:
“In a typical year in the housing market, buyer interest begins to wane before seller interest causing the usual seasonal slowdown as we move into the fall. Due to a delayed spring season and low mortgage rates, we could see buyer interest extend longer than usual into the typically quieter fall. Whether this means more home sales will depend on whether sellers participate or decide to stay on the sidelines.”
Here is the updated video of the Economic, Housing and Financing Market Trends for Sept 11, 2020:
As Hale mentioned, homeowners who are willing to sell their houses right now will play a big role in whether the trend continues. The market needs more homes to satisfy ongoing buyer demand. Maybe it’s time to leverage your equity and move up while eager home shoppers are ready to purchase a house just like yours.
Homebuyer Traffic Is on the Rise
One of the biggest surprises of 2020 is the resilience of the residential real estate market. Lawrence Yun, Chief Economist of the National Association of Realtors (NAR), is now forecasting that more homes will sell this year than last year. He’s also predicting home sales to increase by 8-12% next year. There’s strong evidence that he will be right.
ShowingTime, a leading showing software and market stat service provider for the residential real estate industry (and which most Real Estate Offices in South Florida utilize for booking showings and tracking statistics), just reported on their latest the ShowingTime Showing Index:
“Home buyer traffic jumped again in July, recording a 60.7 percent year-over-year increase in nationwide showing activity.”
That means there are 60% more buyers setting appointments to see homes than there were at this same time last year. The number of potential purchasers was also up dramatically in every region of the country:
- The Northeast was up 76.6%
- The West was up 56.7%
- The Midwest was up 52.1%
- The South was up 46.7%
The Housing Market Is Showing a ‘V’ Type Recovery
ShowingTime also indicates the real estate market has already come back from the downturn earlier this year that was caused by shelter-in-place orders. Here are the year-over-year numbers for each region on a monthly basis (See graph below):We’re way ahead of where we were at this time last year. This data validates the thoughts of Frank Martell, President and CEO of CoreLogic, who recently noted:
“On an aggregated level, the housing economy remains rock solid despite the shock and awe of the pandemic.”
If your current home doesn’t meet your family’s changing needs, let’s connect to help you sell your house and make the move you’ve been waiting for all year.