Home sales are surging higher and higher with the only question left for 2021 is will this be record-setting?
Today’s short report examines home sales through November, and it’s shaping up to be a strong year.
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Year-Over-Year Home Sales Surge
The first of our two graphs today shows year-over-year home sales each month. If sales were positive, the line for the month is plotted in green and extends above the horizontal axis. When sales declined, the month is plotted in red and extends below the horizontal axis.
For the 15th consecutive month, year-over-year home sales grew. The 15% gain in November was especially strong when you consider how active the market was in the latter half of 2020. Many people stayed out of the market when COVID hit, so we saw a very robust finish to 2020. Nevertheless, 2021 has been even stronger.
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The second and final graph in today’s Tallahassee real estate market report shows year-to-date home sales.
Year-To-Date Home Sales Up 16%
This graph plots the number of home sales from January through November of each year.
As of November, the 2021 calendar year has posted the second-most home sales in all years for the Tallahassee real estate market. The 4,744 homes sold thus far in 2021 are 4.9% fewer than the 4,987 homes sold through November of 2005. I would bet there’s no chance that 2021 will set a new record, though it has been a very strong year.
Is The Pace Of Home Sales Sustainable?
The fact that we’re selling more homes today than in the past is not alone a reason for concern, after all, we have a growing population. Leon County, Florida today has roughly 40,000 more people living here than sixteen years ago in 2005 when the previous record was set (a growth of about 16%).
While the pace of sales (again) is not a great concern, I am troubled by the rapid rise in home prices. The lack of homebuilding in Leon County over the past five years has led to tight inventories, bidding wars on most homes except the most expensive ones, and a sense of a coming day of reckoning when mortgage interest rates begin to climb.
If you were planning on waiting to buy a home in a year or two, you should reconsider. Home prices will be significantly higher, and the rate at which you borrow money for the home will be higher too. That’s the double-whammy that I believe will hit the housing market and bring unit sales down far below the current rate we’re seeing.
Take advantage of these low mortgage interest rates today, they are likely the lowest you will see for the rest of your life!
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