Existing Home Sales Enter 2021 in Throttle-Up Setting

Existing home sales rocketed-up 23.7 percent in January 2021 on a seasonally adjusted annualized rate (SAAR) of 6.69 million sales compared to the same period one-year ago according to the National Association of Realtors® (NAR). It was the most homes sold on a SAAR since April 2006. On a non-seasonally adjusted basis, the 367,000 homes sold in January 2021 (up 15.8 percent year-over-year) were the best January since 2006 when 374,000 homes sold at the very peak of the housing bubble. Median home price accelerated to $303,900 in January, a gain of 14.1 percent compared to the prior January. Total sales on a SAAR along with monthly median prices are shown in the following graph.

The next graph also shows existing home sales, but uses raw monthly sales summed up for the past 12-months. In this trailing 12-month view, sales were up 5.9 percent in January 2021 versus January 2020.

The bar chart of home sales shows only the monthly data – not seasonally adjusted or summed metric – commencing January 2018. Sales for the month of January 2021 were up 15.8 percent year-over-year.

Single-family home sales are shown in the following table, based on a sample (not seasonally adjusted) by NAR. More than 50 percent of all single-family home sales ranged in price from $100,000 to $500,000. Sales were up year-over-year (Y-O-Y) in all price ranges except those less than $250,000 – no doubt limited by lack of inventory. It is hard to sell something when there is no inventory. $1 million plus homes showed the largest Y-O-Y increase, up almost 77 percent. The real star here, however, is median days on the market. In 2020, (across single family, condos & co-ops) the median days on the market was 43. This January, all price ranges were less, with homes priced from $100,000 to $750,000 selling in less than one-half of the days seen a year ago.

Other details in the NAR press release included:

• January 2021 ended with a record low-level of listings available for sale at 1.04 million homes, down 25.7 percent vs one year ago
• Months inventory also remained at a record low 1.9 months, with 6 months considered normal, down from 3.1 months a year ago
• The typical home was on the market just 21 days in January prior to receiving an accepted offer, less than one-half the 43 days observed in January 2020
• 71 percent of homes sold in January 2021 were on the market less than one-month prior to a successful purchase offer
• 1 ^st -time buyers made up one-in-three-transactions (33 percent) in January, up slightly from 31 percent in December
• Individual investors acquired 15 percent of homes closed in January
• All-cash sales were seen for one-in-every five transactions (19 percent), down from 21 percent in January 2020
• Distressed sales remained minimal, with less than 1 percent of all closings in the month either foreclosures or short sales

To read the entire NAR press release click https://www.nar.realtor/newsroom/existing-home-sales-tick-up-0-6-in-january

NAR is forecasting 2021 existing home sales will total at least 6.5 million. Fannie Mae and the MBA, however, are less optimistic coming in at 6.033 million and 6.344 million, respectively. Zillow on the other hand, projected existing home sales would hit almost 6.9 million closings this year – literally the apogee since the housing bubble. Time will tell, but interest rates will give mid-course indictors where sales are heading.

Ted