Autumn usually heralds a quieter time for the US property market, but 2020 looks set to be an exception. Latest data released for September points to a busy season ahead. In a seller’s market, buyers face huge competition and ever-increasing prices. And as a result, more will turn to rentals as an alternative.
Fewer homes on the market
The US property market has suffered from a shortage of homes for several years now. In some parts of the country such as Florida, the supply of single-family homes continues at well below 6 months. And post lockdown, inventory levels are even tighter than before.
The latest data for September published by realtor.com finds that availability of homes is 39% less than a year ago. Inventory levels in the 50 largest metro areas in the US have plummeted by an average of 38.1%. This translates to a seller’s market and strong competition for buyers.
Some metro areas saw even bigger drops in supply. In Indianapolis, for example, inventory fell by a massive 58.5% in the year. Riverside-San Bernardino-Ontario in California mirrored the figure with a 55.6% drop in the number of listings on the market.
In a market with lower supply, potential buyers need to act quickly to secure a home they want to purchase. And the data for September shows they have been doing just that. Properties for sale in the US averaged just 54 days on the market last month. In the 50 largest metros, selling time stood at just 44 days, down by 10.
The national average is 12 days fewer than September 2019 and 3 days fewer than August. Realtor.com also reports that this September was the first on record to register faster selling times than August. This finding leads analysts to predict a brisk and busy autumn for the housing market.
Highest prices ever
The surge in demand has led to a spike in house prices and the US property market registered its highest median listing price ever. It went up by 11.1% in the year to September countrywide to reach US$350,000. The increase last month was even higher than August when listing prices rose by 10.1%.
House prices in some metro areas soared even higher in the 12 months to September. Those in Cincinnati saw the biggest jump in the country and went up by 16.9%. Boston followed close behind with a 16.4% increase.
Florida property market in September
Property in the Sunshine State followed similar trends in September. Inventory levels continued to fall, particularly for single-family homes and sales took less time to complete. House prices also rose, although at a more moderate rate than in other metros in the US property market.
Tampa property saw a 7.2% rise in the median listing price last month, bringing the median price in the metro area to US$300,000. In Jacksonville, property prices rose by 4.1% to reach US$323,000 on average.
US property market moving forward
Analysts are unanimous that this autumn will be unprecedently busy. The market still has a lot of pent-up demand and the shortage of listings means that this is unlikely to be satisfied in the short term. Prices meanwhile look set to continue their upward trajectory.
Higher prices and fewer available listings will frustrate many buyers who will look to renting a home instead. As a result, market experts believe that the US property market will open up even more opportunities for buy-to-let investment over the next few months.