Existing home sales rose again in
September and are now blowing the doors off last year’s numbers. The National
Association of Realtors® says sales of single-family homes, townhomes, condominiums,
and co-ops, rose 9.4 percent from August to a seasonally adjusted annual rate
of 6.54 million units in September. After four straight months of increasing
sales, the seasonally adjusted rate is now 20.9 percent higher than in
Single-family home sales rose 9.7
percent month-over-month to a seasonally adjusted rate of 5.87 units and are
now 21.8 percent higher than a year earlier. Existing condominiums and co-ops
sold at annual rate of 670,000 units, increasing 6.3 percent and 13.6 percent
from the two earlier periods.
Analysts had expected sales to
remain on a winning streak but were looking for an annual rate of 6.2 million
sales. Forecasts of those polled by Econoday ranged from 5.8 million to
6.4 million units, all falling short of the actual number.
“Home sales traditionally taper off
toward the end of the year, but in September they surged beyond what we
normally see during this season,” said Lawrence Yun, NAR’s chief economist. “I
would attribute this jump to record-low interest rates and an abundance of
buyers in the marketplace, including buyers of vacation homes given the greater
flexibility to work from home.”
The median existing-home price for all housing
types in September was $311,800, up 14.8 percent from the September 2019 median
of $271,500, marking 103 straight months of year-over-year gains. The median
existing single-family home price was $316,200, a 15.2 percent annual gain, and
the median existing condo price was $272,700, up 9.9 percent.
There were 1.47 million available homes for sale at the end of September, 1.3
percent fewer than in August and down 19.2 percent from the 1.82 million
stockpile a year ago. The unsold
inventory is estimated at a 2.7-month supply at the current sales pace, down
from 3.0 months in August and 4.0-months in September 2019. A six-month supply
has traditionally been cited by NAR as a balanced market.
“There is no shortage of hopeful,
potential buyers, but inventory is historically low,” Yun said. “To their
credit, we have seen some homebuilders move to ramp up supply, but a need for
even more production still exists.”
Sales in vacation
destination counties have seen a strong acceleration since July, with a 34
percent year-over-year gain in September. Yun says, “The uncertainty about when
the pandemic will end coupled with the ability to work from home appears to
have boosted sales in summer resort regions, including Lake Tahoe, mid-Atlantic
beaches (Rehoboth Beach, Myrtle Beach), and the Jersey shore areas. Additionally, a recent NAR study
confirms that many Americans continue to seek new living situations
due to the pandemic.
Properties typically remained on the market for
21 days in September – an all-time low – seasonally down from 22 days in August
and from 32 days in September 2019. Seventy-one percent of homes sold in September 2020 were on the
market for less than a month.
First-time buyers were
responsible for 31 percent of sales during the month, down from the 33 percent
in both August 2020 and September 2019 while individual
investors or second-home buyers accounted for 12 percent of September’s sales. Eighteen
percent of sales were all-cash. Only 1 percent of sales were foreclosures or short sales.
The four-month winning streak extends
to all four regions and each is seeing annual price gains in the double digits.
The strongest gains were in the Northeast where existing-home sales jumped 16.2
percent to an annual rate of 860,000, a 22.9 percent increase from a year ago.
The median price in the Northeast was $354,600, up 17.8 percent from September
Existing-home sales grew 7.1 percent
in the Midwest to an annual rate of 1,510,000 and growth of 19.8 percent from a
year ago. The median price in the Midwest rose 14.8 percent to $243,100.
The South saw sales rise 8.5 percent
to an annual rate of 2.80 million in September, a 22.3 percent annual increase.
The median price rose 13.0 percent to $266,900.
The most modest increase was a 9.6
percent change in the West. Sales there were at an annual rate of 1,370,000, an
18.1 percent increase from a year ago. The median price was $470,800, up 17.1
percent from September 2019.