Analyst: Housing Market Can’t Sustain ‘Frenzied Demand’
September 4, 2020
The housing market showed no signs of slowing in August, with homes getting more expensive and selling faster. The national median listing price increased 10% to a new record high of $350,000 last month, and homes are selling at their fastest pace in 15 months, according to a new report from realtor.com®. Meanwhile, the number of homes on the market sank to a record low as housing shortages persist.
“It’s difficult to imagine that the housing market will be able to sustain the frenzied demand we are currently experiencing, but we have yet to see any signs of slowing,” says Danielle Hale, realtor.com®’s chief economist. “Buyer traffic on realtor.com® is outpacing the record levels we saw earlier this year, suggesting that demand will continue to exceed the number of available homes for sale.”
Housing demand is more intense than it normally is this late into a buying season, Hale says. “Given the strong demand, sellers will return in the driver’s seat for the foreseeable future.”
Inventory dropped 36% in August compared to the year prior. The largest drop in housing inventories in August occurred in Indianapolis-Carmel-Anderson, Ind. (down 55.9%); Riverside-San Bernardino-Ontario, Calif. (down 55.5%); and Providence-Warwick, R.I.-Mass. (down 51.7%).
The lack of homes for sale continues to press on home prices. The Northeast led in listing price gains annually, up nearly 19% in Philadelphia, 14.7% in Boston, and 12.2% in Providence-Warwick, R.I. On average, homes nationwide are selling in 56 days—five days faster than a year ago, according to realtor.com®.