January 2021 Market Update – Single-Family & Luxury Homes

Our single-family real estate market remained strong in 2020:

December sales data show that our single-family market continues to boom. Basically, same story as last month. We did see closings decline slightly, which is probably related more to seasonal Holiday slowdowns and not a change in trends.

• We continue to see fewer homes coming on the market and more homes selling. Less supply, more demand has resulted in increased prices and very low month’s supply of inventory.
• Mortgage interest rates have steadily declined from upper 4% range to upper 2% range in the past 2 years.
• This means buyers purchasing power has increased. Today buyers have 20% more purchasing power than 2 years ago!
• These three trends (pent-up demand from COVID shutdowns, increased purchasing power and decreased inventory) have now resulted in median price increases: For Single Family homes, the trend shows over 11% increase in the past 24 months, and over 20% since December 2019.

This is similar to our national trend, where home sales in December were the highest in 14 years.

3 bed, 2+ bath homes in Uptown and Mid City (zips 70115,70118,70119 & 70130)

 – We are still in a strong Seller’s market with 2.8 months of inventory. Month’s supply has declined about 39% in the past two years. In that time, we have never been in a true Buyer’s market for more than a month, if that.

 – Inventory continues its decline: number of homes coming on the market has declined about 23%

 – Closings continue their long-term trend, up about 26% over 2 years.

– With inventory declining and sales increasing, the seller’s market remains very strong.

Luxury markets – a rare seller’s market

Our luxury markets are also experiencing record demand and lack of supply. In late summer, we shifted from a buyer’s market to a sellers’ market for homes priced between $1mil – $2mil. This is unheard of, as this had been a buyer’s market for years now.  

For homes priced over $2mil, we remain in a buyer’s market, although demand noticeably increased this past summer. This is truly a rarifed market with around 2 sales per month, so trends can vary widely from month to month.

Should sellers list now?

In short, yes. Inventory is declining, so you have less competition. Buyer demand and mortgage rates are showing up in prices: big increases in median sale prices this year!

We get similar questions in the late fall and early winter each year: should sellers wait until after the holidays or even after Mardi Gras? There are definitely more buyers after the holidays, but also more competition from other sellers who also waited for the holidays to end. I always urge sellers to consider that buyers looking during the Holidays are usually VERY serious, and if they are not on the market, those sellers will miss those serious buyers. This trend proved true this year, we were very busy in December!

Obviously, safety issues need to be carefully considered, and allowing buyers into some families’ homes may be all but impossible now. Sellers who can allow showings can find those serious buyers who are looking right now.

For those sellers who do want or need to sell, they should start getting ready to sell if they haven’t already done so. Work on the deferred maintenance, and let’s meet soon so I can explain how we are saving our sellers thousands of dollars by avoiding inspection surprises.