Home prices reach an all-time high.
14 Years! It has been a
slow, steady, uphill crawl to get back to pre-Great Recession prices.
This past quarter, August – October 2020, the median sold price of all homes (single family, condo and villa) nosed ahead of the previous all-time high, in early 2007. It has taken 14 years for home prices to claw their way back.
To have done so in the grips of the COVID pandemic, is nothing short of amazing. And, it is not just sold prices which are up over 15% this past quarter compared to the same quarter 14 years ago. Closed and pended sales are up over 200% from the same quarter 14 years ago! Yes, 200%.
As I postulated last month, I see no evidence of a pull-back in prices or market activity. Here are 6 reasons why: first, it has been a 14-year slow and steady rise in prices; second, unlike the Great Recession where subprime lending and easy credit was the cause of the crisis, housing’s fundamentals and the economy were sound leading into COVID, and therefore, was positioned and is leading the way out; third, the 10-year yield is approaching 1%, which signals that not just housing, but the general economy is coming back; fourth, although millions of Americans remain unemployed, the unemployment rate has declined to 6.9%; fifth, and arguably more compelling for the long term health of housing, the first batch of millennials, the largest demographic group of all times, is entering their prime home buying years; and sixth, there is promising evidence of not 1, but 2 vaccines which have tested at an over 90% positivity rate.