The latest realtor.com index tracking the US real estate since March shows a strong recovery. In late July, it stood at 101 points, indicating that the market had returned to pre-covid-19 levels. Although demand, sales and price growth are now ahead of January, supply still lags behind.
Back on track
Since early March, realtor.com has been tracking recovery in the US real estate market. It has taken over four months for it to get back to its January levels and in late July, it posted 101 on the index.
Markets in the northeast and northwest of the country are well ahead of the 100 mark. Of the 50 metro areas covered in the index, Seattle currently sits in top position with a ranking of 115.5. Metros in the so-called Sunshine Belt, however, still have ground to gain. Tampa real estate posted the highest figure for Florida with 99.1, bringing this metro within a small margin of full recovery.
Recovery of demand and median prices
Covid-19 has had less dramatic effects on house markets throughout the world and some, such as the US, have skyrocketed since the pandemic started. Demand for US real estate started to pick up in early May and in late July, it stood at 116.5, a full 16.5 points ahead of the January level.
Prices also saw exponential growth throughout the stay at home recommendations. In early June, it was already at 105.4 on the realtor.com index. Almost all markets across the US have seen median prices continue to increase all through the year regardless of the pandemic.
A market for sellers
However, strong demand and rising house prices makes a competitive market and right now, US real estate is very much “tipped in favor of sellers,” according to Danielle Hale, Chief Economist at realtor.com. “Would-be spring buyers are shopping well into what would normally be summer vacation season,” she said.
She points out that record-low mortgage interest rates are fuelling demand, but as yet, supply is lagging. Inventory currently has a score of 92.9 on the index, clearly indicating the imbalance between supply and demand. This is “driving quick time on market and listing price growth on par with this time last summer,” according to Hale.
Surge in US real estate sales
Sales have soared in tandem with demand. Existing home sales rose by 20.7% in June compared to May, although they fell by 11.3% in the year. New homes have experienced a particular boom during the pandemic. According to US Census figures, sales of this type of property went up by 13.8% in the month to June. Furthermore, they increased by 6.9% in the year. The latest figures put the pace of sales in July at 99.7 on the recovery index, just a fraction away from January levels.
Analysts agree that the next few months are going to vital for US real estate. Performance over the summer will allow the experts to ascertain how the market is performing. They expect more sellers to put their homes back on sale to alleviate supply. However, it seems certain that the 2020 market generally belongs to vendors rather than buyers.