Home values will continue to surge until available inventory can meet and/or exceed demand. The National Association of Home Builders (NAHB) shared their 2021 forecast This Week in Real Estate, which calls for single-family production to increase 5 percent over prior year, marking the first year since the Great Recession that annual production will exceed 1 million. That comes on the heels of an 11 percent increase in 2020 over 2019. Below are a few newsworthy events from the fourth week of February that influence our business:
U.S. S&P CoreLogic Case-Shiller Home Price Index Finishes the Year of Novels at Double-Digit Rate. With a full year of date, S&P CoreLogic Case-Shiller Index once again proved that 2020 was an unprecedented year in many ways, especially for the housing market. In December, the index surged at 10.4% – the first double-digit increase since January 2014. The month-to-month index also increased 0.85%, making it the strongest November-to-December increase since the data series began. As mortgage rates continued to dip to record lows through the end of 2020, homebuyers persisted with their purchases, leading to the strongest fourth-quarter sales activity since 2009, up about 19% nationally from the last quarter of 2019. For the 18th consecutive month, Phoenix remains the city with fastest home price growth, experiencing a surge of 14.4% in December – the fastest acceleration since December 2013. Seattle remained in second place, with an annual increase of 13.6%. In December, national home prices were 27% higher than the previous peak.
Housing an Economic Bright Spot of America’s 2021 Economy. According to top economists speaking at an online press conference in conjunction with IBSx, the 2021 virtual International Builders’ Show this week reported that as the country continues to rebound from the impact of the COVID-19 pandemic, housing has been a bright spot in the economic recovery. Housing is one of the few sectors experiencing year-over-year job gains, as the industry has hired more workers in the wake of the pandemic, but it still has not been enough to meet the increasing demand for housing. Historically low-interest rates are one factor driving this demand, but a geographic shift in where people are choosing to live is also affecting the housing industry, as lower-density areas become more popular. Single-family starts posted a 2020 total of just under 1 million, 11 percent over the 2019 level. The NAHB forecast is for ongoing gains for single-family construction in 2021, though at a slower growth rate than in 2020. Production is expected to rise an additional 5 percent to 1.03 million this year – marking the first year that total annual single-family production has exceeded 1 million since the Great Recession.
More Americans are Looking to Move as Remote Work Gains Acceptance During Covid Pandemic. More Americans are planning to move this year due to the flexible work from home lifestyle that the Covid-19 pandemic has ushered in, market researcher The NPD Group said. Nearly 20% of people in the country are working from home full time as of December and 28% of Americans have considered relocating during the pandemic, NPD said. In addition, 20% more consumers are planning to move this year compared with the prior year.
Did you know every home listed for sale with Berkshire Hathaway HomeServices Northwest Real Estate is eligible to receive no obligation home warranty coverage the first six months the home is listed with our company?