Median Home Sales Prices Skyrocket in the “COVID Economy”

Median Home Sales Prices Skyrocket in the “COVID Economy”

Here in 2020 may not be the year that you really want to pull up stakes and move, but if you were hoping to sell your home for top dollar then it could be worth it to put your house on the market as home sales prices skyrocket.

Although many sectors of the economy are struggling, the housing sector is having a field day.

In fact, in the third quarter of this year, home prices rose 6.8 percent (compared to a seasonally predictable 4.4 percent decline the year prior). And if you haven’t listed yet, well, your price tag could be limited only by your dreams. In fact, median asking price last quarter was up more than 14 percent over a year prior!

According to Redfin data, sellers are setting the price in their markets, with the average sale-to-list price ratio hitting an all-time high of 99.5 percent. That is 1.4 percentage points higher than this time last year, and means that almost everyone is getting their asking price (or higher) for their homes. With homebuyer demand skyrocketing and a severe shortage of single-family residential inventory in suburban and rural areas of the country, it appears that 2021 could be more of the same if the virus is not brought under control before the New Year.

Of course, while home sales prices are good news for home-sellers, it is not necessarily good news for real estate investors – particularly those whose investment strategies involve acquiring properties at a discount, rehabbing them, and then selling or renting to generate returns. So, basically, it’s not good news for most real estate investors. Hot market conditions in most areas of the country are making it difficult for investors to compete with retail buyers, who tend to be willing (and able) to spend more on the acquisition part of the equation than investors can because an owner-occupant will have the option to postpone upgrades and repairs that an investor must make to create a marketable property for resale or rent.

Fortunately, real estate investors are still able to use some of the most time-tested strategies to acquire properties at deep discounts even in this most unprecedented of times with home sales price increasing. Real estate investors with lead-generation networks or existing relationships in growth-oriented markets are seeing the rewards of networking more than ever these days. At Strategic Passive Investments, for example, we still have a steady stream of great deals with incredible upside potential thanks to our off-market property networks and inventory. Because Strategic purchases properties in high volumes, we often have properties just waiting to be renovated. That enables us (and our investors) to cherry-pick the right fit every time – even in this incredibly competitive market.