Main Content

Housing Market Appears to be Slowing Down, but Remains a Lucrative Investment

The Real Deal

Everything Real Estate in the San Fernando Valley
Monday January 25, 2021
Housing Market Appears to be Slowing Down, but Remains a Lucrative Investment

We’re beating a dead horse, but the real estate market continues to astound and confound; despite new record-low inventory, home appreciation and home sales have continued to increase.

According to the National Association of Realtors (“NAR”), the median existing home price in December 2020 was a full 13% higher than it was in December 2019, coming in at $309,800, nationally. The same time comparison shows that existing sales increased by 22% to a seasonally adjusted annual rate of 6.76 million (though December 2020 represented a national decrease of .7%, and a 1.4% decrease in the Western Region, from November 2020).

This “slow down,” if you can call it that, is partially driven by a new-record-low inventory. National inventory of homes for sale decreased by 16% between November 2020 and December 2020 (which tells us that even though we saw a .7% decrease in sales, demand is still outpacing supply in a significant way). Further, December 2020 saw a 1.9-month supply of homes for sale (a 6-month inventory is indicative of a balanced market).

While things are looking up, the decrease in mortgage applications should not be ignored; this could indicate that lenders are implementing stricter lending policies, or it could indicate that the market is cooling. It stands to reason that we will see a proportionate decrease in new construction, and the entire real estate market will feel the ripple effect of that slowdown. This is not to say that the housing market is no longer a strong investment, it simply means that the “boom” is slowing down; the market will stay hot through at least Summer 2021.

Most experts predict that mortgage rates will remain low, and Spring 2021 will be a good season for the housing market as people come out of their shells post-vaccination. While supply-side issues remain a problem, sellers continue to benefit from this ongoing dilemma.

At the Chernov Team we understand that knowledge is power, and knowledge of how the real estate market is behaving is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.

08

Stay Connected

Sign up to Access:

Exclusive private listings S.F. Valley market insights VIP events

    Thanks for signing up!
    By signing up you agree to our Terms & Conditions

    More Blog Posts

    To Love
    Monday September 20, 2021

    On September 16, 2021, Governor Newsom signed one of four planned bills directed at enabling housing construction i...

    Read Full Post
    Tuesday September 14, 2021

    Since the onset of the pandemic a year-and-a-half ago, sellers have been a lot like the Los Angeles Dodgers – the...

    Read Full Post
    Friday September 3, 2021

    For the sake of not rocking the boat, let’s put aside the question of what is causing climate change and simply a...

    Read Full Post
    Monday August 30, 2021

    On Thursday, August 26, 2021, the Supreme Court of the United States (“SCOTUS”) struck down the Biden Administr...

    Read Full Post
    Tuesday August 24, 2021

    On August 23, 2021, the National Association of Realtors (“NAR”) reported that existing home-sales rose 2% betw...

    Read Full Post
    Monday August 16, 2021

    The new construction sector of the housing market has been seeing positive signs. To briefly recap, the cost of lum...

    Read Full Post