Today’s housing market post-COVID looks significantly different than it did pre-COVID. Housing availability has shrunk, while housing prices have soared.
According to Realtor.com, the number of homes on the market dropped by more than 57 percent in the two years between December 2019 and 2021. In December 2021 alone, the number of homes listed for sale fell by 26.8 percent versus the same month two years prior, amounting to around 177,000 fewer home listings. Meanwhile, the number of homes listed over the first two years of the COVID pandemic marked a 12.9 percent decline from the number of homes listed in the two years preceding COVID’s appearance.
In January 2021, housing inventory hit an all-time low, with barely over one month of supply available.
As a result of this scarcity of homes on the market, home prices have skyrocketed to record heights. In December 2021, the median home price listed was $375,000, up 10 percent from the median list price in December 2020. Prices in that period leaped around 5.4 percent in major metropolitan areas like DC, Los Angeles and New York.
Reasons for the COVID-era Housing Market Shift
One of the main reasons sellers and would-be sellers were more reluctant to list their homes for sale in Estes Park and elsewhere since the COVID outbreak is anxiety over permitting strangers into their homes during a global pandemic.
Another part of the reason for the comparative scarcity of home listings post-COVID is that buyers flooded the market in the early stages of the pandemic. As the likelihood of the pandemic continuing and worsening into the foreseeable future increased over time, buyers were also eager to move into larger homes to accommodate them and their families during lockdowns, travel restrictions, and shifts from the office and classroom to working and learning from home. In Charlotte, North Carolina alone, the number of mortgage applications submitted in the first three months of 2021 jumped by 466 percent from the year before.
Meanwhile, the persistence and growth of the pandemic sent financial markets into turmoil. This led lenders to drop mortgage rates to unprecedentedly low levels of, ultimately, under three percent. Subsequently, buyers became increasingly eager to take advantage of these low rates while avoiding what appeared to most observers a near imminent spike in prices.
Homes sold almost immediately after being listed as buyers made increasingly steep offers, often sight unseen. In December 2021, homes remained on the market for an average of 54 days before being sold. That marks a drop of 11 days from the same month one year prior and 26 days from two years prior.
Rare Housing Market Booms Post-COVID
Not all housing markets everywhere took a hit from COVID. In some areas, the pandemic even gave housing markets a boost. In greater Memphis, there was 22 percent more homes listed in December 2021 than one year prior, while, in Pittsburgh and Philadelphia, the number rose by 10.9 percent and 10.8 percent respectively.