A new forecast from Zillow predicts home sales will peak during the autumn and begin to moderate into 2021, but will remain above pre-pandemic levels.
The coming months will also see home prices remaining higher. Zillow is forecasting seasonally adjusted home prices will inch up by 1.2% from August to November and rise 4.8% between August 2020 and August 2021—the latter replaces a previous forecast aiming at a 3.8% increase in home prices over the same time frame. Zillow explained this forecast was based on strong sales and vibrant pricing during the summer despite a serious imbalance between housing supply and buyer demand, coupled with a delay of this year’s buying season due to the COVID-19 pandemic.
The annualized pace of new home sales in August exceeded 1 million homes, which Zillow said is a level unseen since 2006.
Citing proprietary data for the week ending Sept. 19, Zillow noted that buyers’ demand is showing no signs of abating: pending sales are 21.8% higher than one year ago. However, this could eventually cool as the summer buying season transitions into the traditionally slower autumn months. Average time-on-market for listings is now at 13 days, only one day quicker than the same period last year.
A more significant year-over-year measurement can be found in housing inventory. Zillow reported the decline became acute during the first week of June and has yet to reverse itself, as for-sale listings plummeted by 34.6% below the level set one year ago. This is the greatest year-over-year deficit seen since Zillow started tracking weekly statistics in 2009. There were 13.6% fewer new listings last week versus the same point in 2019.
Furthermore, Zillow noted the median sale price hit a new peak at $284,000 as of the week ending Aug. 8, which 8.7% higher than one year ago and the largest year-over-year increase seen since at least the beginning of 2019. Sale prices were up 2% over the month prior. The median list price rose to $345,000, up 10% from last year but only a scant 0.1% higher than the prior month.