2020 Recap
The housing market continues to play a key role in leading the economy through a challenging year. In 2020 closed sales and median home prices both continued to rise as a result of high buyer demand, despite the uncertainties continuing to surround the pandemic. This increased demand for housing is being fueled primarily by two factors.
First, interest rates closed the year near historic levels with the average 30 year fixed rate mortgage at 2.67%. These low rates increase buying power for all segments of the market, including first time home buyers.
Second, Texas has seen a rapid population growth over the last couple of years. Many corporations have relocated their headquarters and employees to the state to take advantage of a more favorable economic environment and lower cost of living for their employees. The DFW area has been the primary beneficiaries of these relocations. These employees add to demand for both rental properties and home purchases.
Low inventory of available homes for sale continues to be the most concerning component of the current housing market. The DFW area experienced a 25% decrease in active listings in 2020. This drop resulted in only one month of inventory being available at year end. The pandemic appears to be the most significant cause for this decrease in inventory as the economy and health related concerns surrounding the pandemic swayed many would be sellers to put plans on hold for a while.The bottom line is that 2020 was definitely a seller’s market where bidding wars were common and homeowners realized gains on one of their most significant investments – their home!
2021 Forecast
By all accounts the first half of 2021 will most likely mirror 2020 with low inventory, low interest rates and high buyer demand being the theme.
Look for acceleration in the new construction home market as builders look to partially fill some of the current inventory gaps. In addition, as the COVID vaccine become more widely available and the economy strengthens it is anticipated that many of the sidelined sellers may enter the market in the second half of the year. This much needed addition of available homes for sale may help us move towards a more balanced buyer/seller market going in to 2022.
Contact me today if you would like a snapshot of the real estate market in your community. It would be my pleasure to assist you!
Sal Soriano
sal.soriano@kw.com
972.281.7500