- Half as many for-sale homes at end of February 2021 than in February 2020
- Buyers to have increasingly tough time finding house they can afford
Already Inventory-Starved Market Loses More New Listings
Agents and homebuyers need to be in tip-top shape to successfully compete in this spring’s housing market. On your toes ready, lightning fast, and incredibly savvy are the operative words for an even leaner, more competitive housing market than we’ve already seen.
February’s severe weather added another blow to an already inventory-starved housing market. Sellers pulled back approximately 207,000, according to realtor.com, leaving just half as many for-sale homes as there were at February’s end in 2020.
“Last month’s record cold and snowstorms likely caused sellers to hit pause, even if only temporarily,” said realtor.com’s chief economist, Danielle Hale. The only way to “catch up” or regain those 207,000 “lost” listings would be for new listings to grow +25% annually in March and April…which is highly unlikely.
Biggest Supply Drops
Although housing supply drops were experienced nationwide, the biggest supply drops were in Oklahoma City and Kansas City MO.
Denver, San Francisco and San Jose CA were the only major cities that saw inventory gains during the month of February.
Leaner Supply Fuels Meaner Home Prices
Redfin found that asking prices of newly listed homes hit an average price of $347,475 in February, an all-time high.
Likewise, Redfin found that 55% of the homes that went into contract in February did so within the first two weeks of being on the market.
Redfin’s chief economist, Daryl Fairweather, said, “Although pending sales and new listings have taken a small hit in the last couple of weeks (due primarily to winter storms and mortgage rate hikes), home price gains are showing no signs of slowing down.”
Weather Disruptions Temporary, Increasing Mortgage Rates Are No
March is already seeing warmer temperatures and budding trees as February’s arctic blast grows more and more faint in the rear view mirror. Higher mortgage rates, however, are not in the rear view mirror.
Higher mortgage rates most definitely affect affordability. And with affordability growing increasingly tenuous, we may see fewer bidding wars as the spring housing market blooms.
Thanks to realtor.com, Redfin and CNBC.
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