The Housing Market Pre and Post COVID
The housing market has shifted dramatically since the days prior to the arrival of the Coronavirus pandemic. These past two years have seen a tremendous decrease in available listings. Both new construction and existing homes for sale have plummeted. With fewer homes on the market, it's no surprise that prices have been on the rise.
A new report from Realtor.com noted that there were 26.8% fewer listings in December 2021 than there were in the previous year at this same time. With the holidays and cold weather across much of the country, this is already a slower period in real estate. This year's drop translates to approximately 177,000 fewer listings than even a year ago. That's a significant drop. Many wonder what these statistics may predict for the future of the housing market.
Real estate experts are hopeful that things will start to turn around throughout 2022. However, it's likely any change will happen slowly. Inventory is expected to remain at low levels, probably half of what the market experienced prior to the onset of the pandemic. This means that buyers will still be at a disadvantage. Anyone seeking homes for sale in Long Beach will need to move quickly and strategically if they want to stand a chance at a suitable listing.
The Realtor.com report indicates that 12.9% fewer homes were listed during the pandemic in comparison to numbers in 2017 through 2019. Sellers were often not willing to open their homes to strangers for showings during this time, particularly in the earlier stages and prior to the availability of vaccines.
Conditions became amenable to soaring increases in home prices. Inventory remained low while a number of motivators led buyers to flock to the market. For one, mortgage rates hit record-low numbers, falling below 3% for the first time in decades. The catalyst for such historically low rates was the upending of the economy due to the uncertainty surrounding the Covid-19 pandemic. Buyers wanted to lock in their rates before they began to climb again.
Median home prices were up 10% compared to December of 2020. Metropolitan areas like Washington, DC, Los Angeles, and New York were up approximately 5.4% in that year. It would seem that prices will probably not climb much higher, as buyers are beginning to reach the limits of affordability. Las Vegas, Austin, and Tampa saw the highest increases.
This time has been a boon for sellers. Properties spent an average of 54 days on the market as of December of 2021. The average a year ago was 11 days more. It was 26 days more in 2019. This is quite surprising during what is typically the slowest time of the year for the real estate market. In fact, houses sold faster on average this past December than they did during the busiest season pre-pandemic.
A few markets were looking promising with an uptick in homes for sale. Memphis had a 22% increase in the past year. Pittsburgh was up 10.9%, and Philadelphia was not far behind at 10.8%. Buying a home will still be a challenge, but perhaps there is hope.