The Housing Market Continued Its Wild Ride In October
The housing market continued its wild ride in October. According to realtor.com’s October, Housing Trends Report sales activity and prices were at record levels. “For the first time since 2011, homes sold faster in October than September and prices remained at their summer peak of $350,000.”
Buyers lured by historically low-interest rates with the current rate around 2.5 percent. The traditional market slowdown which usually begins in October is non-existent. “This unseasonal trend continues. We are still seeing lots of buyers. Even though prices are higher than a year ago people are looking at the low-interest rates and staying in the market,” explains realtor.com’s Chief Economist Danielle Hale.
“Record low rates in October pushed tons of homeowners to refinance and new buyers to apply. Applications with Better.com were up 15 percent in October over September. Uncertainty about the election likely drove rates down too,” explained Capital Markets Analyst Brendan Philips. “Though with rates back to tracking news about the economic recovery – which is directly tied to winning the battle against the pandemic – record low rates may be behind us,” Philips adds. Better.com explains the various factors that impact and move rates.
The market’s frenetic pace saw homes selling 13 days faster than last year at the same time. That was even one day faster than in September. Three metros where homes sold the fastest compared to October 2019 included Hartford, Conn. (23 days faster), and Virginia Beach, Va. (22-days faster) while San Diego came in at 20 days less than last year.
Looking at the numbers. The national median listing price continued to rise. That year-over-year increase was 12.2 percent, to $350,000 in October. That’s up from September’s median price which had double-digit growth at 11.1 percent compared to last September.
The highest median price listing gains were in Los Angeles, Philadelphia, and Cincinnati. In the Los Angeles metro, the median listing price grew 16.9 percent from a year ago to $995,100. It’s not surprising with the active listing count down almost 23 percent. Consider that median price is just that which doesn’t buy you much house in the desirable areas of Los Angeles.
On Los Angeles’ in-demand Westside there is a small two-bedroom one-bath home totaling 926 square feet. With no recent updating or remodeling, it’s currently listed at $1,199,000. Given its location and lot size of 5,807 square feet, the property will probably sell quickly as a teardown.
If you’re from Los Angeles the numbers in these two other cities with top price increases sound good even with significant year-over-year price gains. Philadelphia ranked second for October’s steepest price gain at 16.7 percent which puts the median listing price at $349,100. Heading to Cincinnati even with a 16.3 percent price increase the median price only reached $310,000.
In addition to price increases, the big story in the housing market continues to be there simply aren’t enough homes for all the buyers out there right now. According to realtor.com, there are around 500,000 fewer homes for sale than a year ago. That number could be turning around looking at the October numbers when newly listed homes were down 7.7 percent compared to last year. That’s considerably better than September when that number was down 13.8 percent from a year ago.
Realtor.com’s Hale sums it up well. “Right now, people just want to be home.”