I’m going out on a limb this month. With just days before the Presidential election and the likely weeks of controversy afterward, I have decided to go ahead and make some year-end predictions. Some would say this is crazy but rather than getting caught up in the now, I’m looking to the future.
Ten Months Down—Two Months to Go
- Number of Homes For Sale
Of all the data, this should be the easiest. With a typical start in January and February, it looked like homeowners were ready to finally jump back into the for-sale market with both feet. Of course, when Covid hit in early March, the number of homes for sale seemed to stall – until mid-way through April. Then the big slide began. With dropping mortgage interest rates and owners working from home, home buyers started (and continue) to buy up most of the home inventory.
Based on what For-Sale inventory counts did in the previous 3 years, my prediction for the remaining 2 months of 2020 is that we will end the year right around 2,400 homes for sale. Regardless of how low our inventory goes; it will be the lowest number of homes for sale at the end of a year in at least the last 20 years.
- Number of Pending Sales
This prediction may be a little trickier. On average, the number of days it took last year from offer acceptance to closing during the last two months of the year was 48 days. This means that most offers written after November 14th last year didn’t close until January of 2020.
With over 3,100 homes currently in the sale pending que and 1,000 of those new construction at various stages, I am going to predict that we will end 2020 with just under 2,600 homes in Sale Pending status (2019 ended with 1,545 sale pendings).
- Number of Homes That Will Sell in 2020
There is no doubt that barring a complete shutdown of the real estate economy, the year 2020 will end with record high closed sales. The December 31st counts for the past 3 years all ended with over 14,000 sales. 2017 was the highest count with 14,603 sales recorded as of the last day of the year.
With the remaining time left in the year and the increased number of homes in sale pending status, I am going to make a bold forecast for 2020 closed sales by predicting a December 31st closed sale count of 16,000 closed sales and shattering the previous record high set in 2017 by well over a thousand transactions.
- Single-Family Resale and Single-Family New Construction Median Sale Price
Sale pricing and appreciation of values are two distinct numbers. Until 2020 has ended and all final sales are recorded, I cannot give an accurate prediction of home price appreciation. There are so many variables including the affordability of mortgage money alone that will make me wait until late January 2021 to determine home appreciation rates. However, median sale prices are much easier to calculate since that data is tied directly to closed transactions.
- Single Family Resale. I predict that the median sale price ends the year at $215,000—$20,000 higher than 2019. The main factors in this jump is lack of inventory, Covid-19 buyers needing more space in their homes and sub-3% mortgage interest rates.
- Single Family New Construction. I predict that the median sale price ends the year at $295,000—$25,000 lower than 2019. The main factors in this drop is a lack of resale inventory pushing more buyers to buy new, more entry level new construction pricing aimed to fill that gap of resale inventory. The sub-3% mortgage interest rates allow previously credit stretched new home buyers the ability to buy new construction.
Overall, this is about as brave as I can get with forecasts as we head into the final two months of 2020. In a year with a world-wide pandemic and political election looming, it is proof that there is “no place like home” to be… buying, selling, living, working, schooling, remodeling, refinancing.