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It’s Monday January 4, 2021 and this is your weekly look at the latest Altos Research data that came in over the weekend for the entire US real estate market. Each week, Altos tracks every home for sale in the entire US. Pricing, changes in pricing, supply and demand so that you can see the trends in the US housing market far before it becomes available through the traditional media channels.
It’s the first week of the new year and this is always a fun time to look for signals in the data. All of the coolest Altos Research leading indicators start to make their moves in January, which sets up the first quarter, which really gives you the directional insight for the whole year.
Available inventory has been the story all year of course, and January 1 is a great time to highlight the deep crisis we’re in. Just over 419,000 single family homes are available for the entire country right now. That’s down from last year’s already record low 763,000 and I pulled this chart to show just a few years ago we would start the year with a million or more homes on the market ready for spring. We have 60% fewer homes on the market than normal. As we’ve pointed out before this is not just a pandemic phenomenon. Every year for the last decade we’ve been losing purchasable inventory to rental. Single family homes that would have been sold are now kept for rental. As interest rates have been ultra cheap for the whole decade, it’s been a really good deal to keep your old house and rent it out. 7 million Americans have done that this decade. That’s about 7% of the stock, and you can see the impact year over year here.
Total inventory will keep inching down each week for the next few weeks before the bulk of the spring inventory starts coming to market. My bet is that we bottom at fewer than 400,000 probably the first week of February before total inventory starts climbing.
When we look at the total new listing volume, the New Year is always the trough and this year is no exception with 23,000 new listings this week. Next week you’ll see a sharp jump in new listings. You can see the New Years’ column here for the last five years. Since our week to week listing inventory is about normal, it really underscores that the market this year is a demand-driven market. If we’re lucky, we’ll have a more normal curve of listing inventory this year, and have more homes to sell into all this demand. Like all the other booming financial markets, real estate seems to remain untouched by any pandemic related weakness.
And finally we see how that impacts prices. Single family home prices in the US start 2021 at $338,000 we’re finishing 10% higher than last year. Our price of new listings measure, which is the smallest group of the year this week, is at $284,900. The new listings price will jump next week. We like to observe the slope of this January jump each year to see how strong price appreciation will be in the coming few quarters. All signs are bullish for now.
That’s the data for this week. Remember next week we have our monthly webinar where we’ll dive into more detail with the numbers, we’ll review the latest legislative decisions and the potential risk factors we’ll face in 2021. We also take time to look at regional and local data. So if you’re a realtor and you need to communicate with your buyers and sellers, then you should join this webinar. There’s a link in the description below to register. That’s next week Wednesday the 13th at 10am Pacific. You should join us.
That’s all for now. A very happy and prosperous new year to you.
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