What a year 2020 was for our local real estate market!
We entered the year in a strong seller’s market. As I wrote a year ago, buyer activity was up, home prices were up, but inventory was down. A couple months later, the pandemic hit and we had to drastically change how we help buyers and sellers. For the rest of the year, the Tri-Cities housing market kept favoring sellers more and more.
Here’s a look at how the year played out, using some of the key data points we look at when talking about the state of the real estate market: inventory (active listings), homes sold, and home prices.
Tri-Cities Active Real Estate Listings
Probably no other data point shows how heavily we’re in a seller’s market than this one. Every month we take a snapshot of how many homes are available to be purchased — we call this our “active inventory.” Over the course of the year, inventory dropped by 36%.
When I started in real estate 17 years ago, it was normal for us to have between 1200-1400 homes on the market in any given month. Even as recently as 2015, we typically had 800-900 available homes each month.
Now, we finished 2020 with fewer than 400 homes on the market. Inventory dropped the first couple months of the year, which is common. But rather than rebounding in both spring and summer, last year’s inventory was flat for a few months in spring, then fell off the proverbial cliff in late summer and through the rest of the year.
Tri-Cities Sold Homes
Here’s where it gets really strange. With inventory dropping throughout 2020, you’d think maybe there’d be a decline in how many homes were sold. But the opposite happened.
The number of homes sold hit record levels last summer! Never before have we seen 500+ homes sold in a single month in the Tri-Cities, yet we hit that milestone twice in 2020. (When I was starting out 15+ years ago and inventory levels were well over 1,000 homes, we still only sold about 300-400 per month.)
What we’re seeing here, in my opinion, is a direct result of the pandemic. The health crisis really put a premium on having a home to call our own. That brought more buyers into the market, and kept sellers away. Many sellers were probably staying out of the market for the same reason (homes became more important last year), and also because they didn’t want strangers coming into their homes during a health crisis.
What’s really interesting, and offers a great visual to show what a seller’s market 2020 was, is when we put both of the above graphs together into one chart. Have a look.
Over the last couple months of 2020, we sold more homes during the month than were on the market when we did our 1-day snapshot! It shows what a difficult year it was to be a home buyer. Not many homes available, and the ones that did come to market usually sold very, very quickly.
Tri-Cities Median Home Prices
If you get my monthly newsletter, you already know this: Tri-Cities median home prices rose 8% over the course of 2020. That may sound like a lot, but it’s actually more tempered growth than 2019, when home prices rose 11.4%. Back in 2015, prices rose 14% in one year. Here’s what home prices looked like last year.
As you can see, prices were fairly steady for the first half of the year before they jumped in August. That’s the same time that the number of homes sold hit a record high, and the same time that inventory was tumbling.
Takeaways for Tri-Cities Buyers & Sellers
To sum it up, in 2020 an already strong seller’s market leaned even more heavily toward sellers. If you’re thinking of selling, you should have no problem finding buyers as long as
- you price your home correctly
- your home is in great, buyer-friendly condition
If you’re planning to buy this year, the good news is that mortgage rates are really low so your dollar will go further. But you absolutely must be pre-approved before you even start looking at homes, because you need to have your financing in place so you can move quickly when you find a home that you love. And speaking of moving quickly, when the market is as competitive as it is now, you probably won’t have time to “sleep on it” — when you find a home you love, be ready to act.
As always, if you have ANY QUESTIONS about buying or selling a home in the Tri-Cities, get in touch anytime. We have a team of experienced agents who loves to answer questions and help you however we can. There’s a contact form below, or just text/call anytime: (509) 392-4705.