Inventory is down, prices are up, and sold listings are up too. The market is still clearly in favor of sellers. But for how long?
This past month, the average home sale price rang in at $653,519. Prices have been rising ever since the pandemic started last year, when home prices were $608,817. In a year, home prices have increased 7.5%.
Active listings fell 19% since last year too. There are currently only 1,517 homes for sale in Staten Island; last year 1,874 properties were available. Housing supply has now dwindled every month for an entire year since lockdown ended last June 2020. A tighter supply will of course increase demand, and the amount of new listings has not been keeping pace with the rise in sales.
In the month of May 2021, 621 new listings were put up for sale. Not a bad showing, but last year May listed 749 homes. On the other hand, sold listings in May of this year are way up from last year at 422 from last year’s 319. 422 home sales is historically high, marking a 32% sales increase year over year.
Pandemic Real Estate: Before vs. After
During lockdown, there was a sense of fear around all financial markets. Because of this, only around 100 sellers listed their homes during April 2020, the peak of lockdown. In response, the US government slashed mortgage rates to historic lows in order to prevent another housing collapse. Because of this, sales slowed way down during spring and summer of 2020.
Mortgage rates have now crept above 3%. According to CNBC, 30-year fixed rates are now 3.15%. However, the rise is not significant enough to buck the trend. The market would tip in favor of buyers once rates exceed 5%.
Curiously, days on the market are up slightly from the prior month to 107. Just a few months ago, homes were selling in less than 100 days. This may be a slight omen that prices will begin to pull back, but homes are still selling faster than they were in May of last year, when the average home sold in 112 days.
Keep your eye on mortgage rates over the next couple of months. If interest rates continue to rise, it will probably cause prices to fall as mortgages become expensive. But as long as rates stay the same or even fall, don’t expect prices to come down.