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It’s a Wrap: 2020 Existing-Home Sales Hit New Highs

Jan 25, 2021 by Marc Rapport
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Four presidents and two recessions ago, home sales in the United States hit a new annual high. And now, for 2020, they’ve done it again.

The National Association of Realtors (NAR) reported on Jan. 22 that 5.64 million existing homes were sold in 2020, a 5.6% jump from 2019 and the most since 2006, when a housing boom was about to bust and the Great Recession would follow.

Other historic numbers from a year like no other: $309,800 and 1.9 months. The former is the median existing home sales price; the latter is the supply of housing inventory, now down to 1.07 million.

Irony in action: Dystopian disease helps drive market euphoria

Time on market also plummeted, to 21 days in December from 41 days in December 2019, the NAR says, adding that 70% of homes sold last month were on the market for less than 30 days.

Indeed, during a pretty bad year to be a human being in some pretty big ways, it was a great time to be one selling a house in America. (Or to own stocks, for that matter.)

And the NAR sees more of the same as a new year, a new administration, and a revived COVID-19 vaccination campaign rolls out.

'This momentum is likely to carry into the new year'

Said NAR chief economist Lawrence Yun in the trade group’s announcement: "Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic. What's even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market."

Mortgage rates, which are expected to continue near record lows (around 3%); improving economic conditions fed by government stimulus; and the vaccine are expected to help drive that momentum, the NAR says.

And it seems reasonable to assume that the work-from-home imperative that has become a trend will continue to help drive sales from people heading out of apartments and smaller houses and condos into the suburbs and beyond.

The Millionacres bottom line

There are a lot more numbers to chew on in the trade group’s data. Click here to see regional and housing type breakdowns, if you’d like. The bottom line is that people looking to buy or sell in 2021 as an investment or a place to live will encounter hot conditions in many if not most markets.

The NAR says seasonally adjusted existing-home annual sales in December 2020 were at 6.76 million. The final tally for 2020 was 5.64 million. While predictions are just that -- predictions -- it’s easy to see why 2021 may well turn out to be another one for the books.

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