Existing Home Sales Soared in 2020 Despite Record Low Inventory
Existing home sales hit a 14-year peak in December, with a seasonally adjusted annualized rate of 6.76 million units closed. If housing inventory were robust enough to meet current demand, there may have been nearly 8 million sales closed, says the National Association of Realtors chief economist. Only 1.07 million homes were for sale by the end of December, a 23% annual decrease and the lowest number since Realtors began tracking in 1982. In addition to the low inventory, home prices increased 12.9% annually. Still, home sales were 22% higher than December 2019, according to CNBC.
The median price of an existing home sold in December was $309,800, a 12.9% increase compared with December 2019 and the highest December median price on record.
Part of the sharp increase in the median price is that home sales are stronger on the higher end of the market, where there is more supply. Sales of homes priced below $100,000 were down 15% annually in December, while sales of homes priced between $500,000 and $750,000 were up 65% annually. Sales of million-dollar-plus homes were up 94% from one year ago.
Steep competition for homes also has more buyers making all-cash offers.