We’ve had frenzy conditions previously.
Can previous experience indicate what might be brewing for 2021?
The last time we had full-blown frenzy conditions was in 2013 – let’s use the October 1 to September 30 timeframe so we can get a good experience of this year. Because we’ve had such a rebound, let’s also ignore the covid-19 effects – we’ve made up for it since:
NSDCC October 1 – September 30
Here are the indicators from the last frenzy that suggest the frenzy is already underway:
2011-12: The number of listings declined 16% from the previous 12-month period, but sales increased 8%. This year the number of listings dropped 8%, and sales increased 3%.
2011-12: Mortgage rates dropped under the magical 4% number, and you could get a 30-year fixed rate mortgage for the same as the start rate on a neg-am loan from just 5-6 years before! Likewise, this year we dropped under 3% for the first time ever, and it has added a magic-elixir quality to the market.
2012-13: Presidential election. There might be an indirect connection, at best, but a presidential election might bring more certainty into the home buying-and-selling equation for some people.
2012-13: Inventory exploded – and so did sales. The number of NSDCC listings increased 54%….AND SALES WENT UP 52%! The median sales price went up 17% too. You could say that there was pent-up activity from the last recession that busted loose. But if we get half the action we got in 2012-13 in next year’s selling season, and inventory AND sales go up about 25% each, it will feel like a full-tilt-boogie!
2012-13: The ratio of listings-to-sales was 1.58, and this year it is an eerily-similar 1.54!
We will need a surge in inventory to re-start the frenzy in 2021, because it should simmer down over the holidays. But with so many other unique reasons why sellers should be more motivated to sell next year, it sure seems like a frenzy is likely!