The US housing market recently smashed almost every record on the books. Median sales prices climbed to a new high; inventory levels dropped to a historic low; and more homes sold for more than their list price than ever. But, as the market moves forward into the traditionally quieter summer period, all signs point to a return to less frenzied trends.
Highest median sales price
May set the record for median prices as the average in the US housing market hit US$377,200, the highest ever. This represents a year-on-year hike of 26.3% and an increase of 2.4% on April.
Some metros experienced even bigger jumps in prices. Properties in Austin, Texas went up by a massive 42% while those in Phoenix, Arizona and Detroit soared by 33% and 32% respectively.
The Florida property market registered more moderate increases, but most metros still reached double-digits. Properties in Tampa saw a 20% rise, closely followed by Jacksonville with a rise of 17.2%. Homes in Orlando increased by 14.1%.
Higher than list price
The main engine behind the huge growth in house prices in the US lies in demand. 54% of sellers received more than their asking price, up from 26% a year ago. And as a result, more homes than ever sold for higher than their list price in April.
Another sign of the competitive market comes in the time taken to sell properties. According to data from Redfin, properties in the US took just 16 days to sell, down from an average of 38 days in May last year. May set yet another record in this statistic too.
Rocket-bottom supply in US housing market
Brisk sales have characterised the real estate market since the pandemic was declared last year. As a result, inventory levels have fallen continuously across the country as supply could not keep up with demand.
In May, the number of homes on the market in the US was 27% below than a year ago, the lowest figure on record. The biggest drops in supply were in Baton Rouge, Louisiana where listings fell by 60% in the year and North Port, Florida with a 51% decrease.
Just 7 of the 85 largest metros in the Redfin statistics saw an increase in supply. They included Philadelphia, New York and San Francisco. However, none of them posted a rise of more than 14%.
All year-on-year data for the US housing market is slightly exaggerated because of lockdown in April and May last year. However, the figures highlight the intense demand and fierce competition to buy a home.
Recent sales data for May showed a tempering in the market and new listings are starting to make an appearance across the country. Florida is a case in point. This recent trend leads analysts to believe that a slowdown is on the horizon.
“May marked the likely peak of the blazing hot pandemic housing market, as many buyers and sellers are vaccinated and returning to pre-pandemic spending patterns,” said Redfin Lead Economist, Taylor Marr. He pointed out that while “sellers are still squarely in the driver’s seat”, there is a limit to how high buyers are prepared to go.