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Buyers on Notice: Act Quickly and Be Prepared to Pay Up, According to Realtor.com January Housing Report

February 05 2021

2021 kicks off with record low inventory and rising home prices, foreshadowing a competitive home-buying season

SANTA CLARA, Calif., Feb. 4, 2021 -- If January provides any insight into what to expect this spring, home shoppers are in for another fiercely competitive home-buying season with record low inventory pushing prices higher and homes selling more quickly, according to the realtor.com® Monthly Housing Trends Report released today, which shows buyers returning to the market in earnest at the start of the year.

"Demand for housing was already strong coming into the year and we don't see that slowing down with millennials reaching prime home-buying age, and many remote workers still in the market for more space," said realtor.com® Chief Economist Danielle Hale. "At the same time, sellers failed to materialize in January, which has pushed the number of homes for sale to new lows and suggests that our new normal of rising prices and brisk sales is here to stay at least through the first half of the year. Those thinking of getting into the market this spring should brace themselves for a competitive season, especially in the market for existing homes."

Strong buyer demand and a lack of sellers push inventory to new lows

The number of homes for sale in the U.S. in January was down 42.6% year-over-year, a new low that translated into 443,000 fewer homes for sale compared to the same time a year ago. Active listings also fell below 600,000 for the first time since realtor.com® began tracking the metric in 2012. Despite an uptick in sellers toward the end of December, newly listed homes were down 23.2% nationally year-over-year in January. This is a marked contrast from single-family construction trends for new homes which have seen 20% or greater year-over-year increases in both starts and permits in each of the last four months.

Housing inventory in the 50 largest U.S. metros overall declined by 41.8% over last year in January, up from December's 38.6% decline. New listings in the 50 largest U.S. metros were down 17.3% year-over-year with Cleveland, Jacksonville, Fla. and Memphis, Tenn. registering the largest drops at 37.1%, 36.9% and 32.6%, respectively. Of the 50 largest metros, two Northern California markets -- San Jose and San Francisco -- and Denver saw an increase in the number of newly listed homes at 24.8%,14.4%, and 1.8%, respectively.

Homes sell fast with Virginia Beach, Va., Sacramento and Birmingham, Ala., leading the decline in days on market

The typical U.S. home spent 76 days on the market in January, 10 days less than last year. The decline in days on market slowed compared to December 2020, when homes sold 13 days more quickly than the previous year.

In the 50 largest U.S. metros, the typical home spent 60 days on the market -- 12 days less on average, compared to January 2020. Homes saw the greatest decline in time spent on the market in Virginia Beach (-27 days); Sacramento (-24 days), and Birmingham, Ala. (-22 days). Only two markets -- New York (+11 days) and Miami (+5 days) -- saw time on market increase compared to the previous year.

Home listing prices continue to go up, up, up

The median national home listing price grew by 15.4% over last year to $346,000 in January, higher than December's growth rate of 13.4%. The nation's median listing price per square foot was up 17.5% in January compared to last year.

Listing prices in the nation's 50 largest metros grew by an average of 10.9% from a year ago with listing prices increasing the most -- 16.8% -- in the Northeast. Prices jumped 12.3% in the West, 10.4% in the Midwest and 8.0% in the South year-over-year.

At the metro level, Austin, Texas, (+30.2%), Rochester, N.Y., (25.9%), and Los Angeles (+22.4%) posted the highest year-over-year median list price growth in January. Miami (-3.2%), and Minneapolis (-0.4%) were the only top 50 metros to see listing prices decline year-over-year in January.

Metros With the Largest Decline in Active Listings

rdc Buyers on Notice January 2021

*Some data for Pittsburgh, Seattle and San Diego has been excluded due to data quality.

About realtor.com®

Realtor.com® makes buying, selling, renting and living in homes easier and more rewarding for everyone. Realtor.com® pioneered the world of digital real estate more than 20 years ago, and today through its website and mobile apps is a trusted source for the information, tools and professional expertise that help people move confidently through every step of their home journey. Using proprietary data science and machine learning technology, realtor.com® pairs buyers and sellers with local agents in their market, helping take the guesswork out of buying and selling a home. For professionals, realtor.com® is a trusted provider of consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com.