Demand for residential real estate was at near historic records throughout the summer of 2016. With buyers clamoring to snap up the available properties, prices predictable skyrocketed in many markets in the United States.
While the fall season is typically a slower one for the real estate industry, the activity in the market over the past few months, and the latest demand and inventory data, seems to be pointing toward a hot autumn for home sales.
According to a September report released by realtor.com, property transactions in the ninth month of 2016 were four percent higher than they were in the same timeframe in 2015. Meanwhile, prices continue to reach new highs rather than rebound back to normal averages.
Digging deeper into the latest realtor.com report, we see that the expected median age of listings — a key metric that provides an accurate measurement of real estate inventory — is three days lower than it was in September 2015. At 77 days, the September 2016 median listing time is still about five days longer than it was in August 2016. The month-to-month drop simply shows that the typical fall slowdown is occurring, just not at a rate that bringing the market back down from some of its historic highs.
Overall inventory continues to be much lower than it was at this time last year. Fewer than 450,000 new listings entered the housing market last month.
The median home listing price was $250,000, which was almost 10 percent higher than it was in September 2015 and unchanged from the figure in August 2016. This shows that average time on the market may be slowing down as we head into fall, but home prices are staying steady at extremely high levels. The $250,000 marks an all-time high for September.
Why Are Prices and Demand Still So High?
According to the chief economist of realtor.com, the market isn’t slowing down as much as it usually does in the fall because there are still plenty of summer buyers waiting to reach their goals. Many of these market participants were temporarily blocked from buying properties by the fierce competition that played out in June, July, and August. They didn’t give up; they just put off buying a property until September or October, hoping that they would find fewer competitors.
Pent up demand is combining with near record low mortgage rates to continue to drive a hot real estate market well into the fall months.
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