Home sales blast off for record month in October, hottest of 2020
The widening chasm between housing supply and demand drove record sales growth and caused prices to hit a seven-year high in October, according to Redfin.
Home sales surged 23.9% year-over-year — the largest annual spike since Redfin started tracking the data in 2012 — while rising 3.8% from September. The high level of activity pushed median prices to $335,900, up 14.2% from the year before — the second largest growth since 2012 — and 0.9% month-over-month.
For-sale inventory plummeted 22.1% and 1.4% from year-ago and month-ago rates, respectively, to a total of 1.66 million units.
"October very well may have been the hottest the housing market gets this year," Redfin chief economist Daryl Fairweather said in the report. "Buyers who stepped away from the market at the beginning of the pandemic had been making up for lost time, which sent prices skyrocketing."
Home sales rose annually in all 85 of the largest housing markets across the U.S., led by 71.3% in Bridgeport, Conn., 54% in Elgin, Ill., and 53.9% in New Haven, Conn.
With the exception of a 0.8% annual decrease in Honolulu, all other metros logged growth in median prices. Bridgeport saw the largest at 39.4%, followed by 30.1% in Memphis, Tenn., and 23.5% in Newark, N.J.
Only three markets posted yearly increases in properties for sale. San Francisco climbed by 48.4%, New York by 25.4% and San Jose, Calif., by 3.7%. That tracks with reports of a pandemic and remote work-induced exodus from major cities. Allentown, Pa., had the largest drop in for-sale supply with 50.2%, trailed by 49.4% in Kansas City, Mo., and 49.1% in Salt Lake City — the most competitive metro area in both September and October.
While the start of the fourth quarter avoided its typical annual slowdown, 2020's been anything but typical. COVID-19 infection rates and subsequent restrictions are mounting in November, causing a dampened outlook for the coming months.
"Given that we are entering a winter wave of the pandemic, housing demand will likely lose a bit of steam until 2021, cooling the market from red-hot to just hot," Fairweather continued. "If you are a seller, it’s probably a good idea to wait until the new year to list your home, but if you are a buyer, right now is a short window of opportunity where competition likely won’t be as intense as it was in October.”