We are up to our eyeballs in the inventory shortage. You can’t look at one news site without seeing something about the shortage. This has been going on for months and months, so what gives?
A few things.
First of all, we still strongly believe this is not an inventory shortage, but a listings shortage. The homes and sellers are out there, they just need their trusted real estate agent and advisor (you) to help them understand the value of their home, and how to navigate this frothy market.
But there is something even more important than the pandemic that is impacting inventory.
According to a Statista study in September of 2020, there was a 79% decrease in new homes built between 2010 and 2019. Between 2010 and 2019 there were only 5.8 million new homes built while the three decades before it 27 million, 26 million and 25 million new homes were built respectively. The last time we saw such a low amount of new construction was the 1930s.
This stark decrease is certainly a factor in what we are seeing today alongside the pandemic.
But, it doesn’t mean there is a reason to panic.
The fundamentals of why people move (marriage, divorce, new babies, empty nest, new job, retirement, etc) have not changed and will not change. If anything, the new flexibility so many working adults across the US are seeing with remote work is likely to increase and let them move for work, but on their own terms.
And to top this all off, Freddie Mac expects home sales to reach 7.1 million in 2021. 7.1 million homes would be a 25% increase year over year in home sales from 2020 which saw 5.65 million home sales, during a pandemic, while we only say 5.25 million in 2019.
If Freddie Mac is correct in their predictions, we should feel hopeful. Those listings have to come through an agent, will it be you?
Now let’s dig into April and the upcoming May & June outlook.
April Home Sales
April closed out with 539K home sales across the country. That’s 5% less than our prediction of 565K. This was a 3% increase from the home sales in March, but year over year it was a 48% increase. Not at all surprising as April 2020 was when COVID-19 was really setting in across the US and only 364K homes were sold.
May and June home sales prediction
Our May prediction has been adjusted slightly from last month and we are now predicting there will be 622K home sales which would be a 15% increase month over month and 72% year over year.
Based on the activity inside our MoxiWorks products we predict there will be 650K home sales in June which would be a 5% increase month over month and a 29% increase YOY.
You control the listings
Our rallying cry remains that you and your agents have the control to make the market. 7.1 million homes won’t sell themselves.
So do the thoughtful home property reviews, do the comps analysis, show your clients why selling their home is a good idea. Doing these presentations are proven to make these transactions happen.
Our data team just pulled the stats on agents using MoxiPresent with their clients and the results speak for themselves:
- In 2020, agents fully utilizing MoxiPresent did 77% more transactions and saw 93% higher sales volume than those without MoxiPresent.
There is a lot to shake out in the market, so let’s stay proactive and persistent, and let’s make the market.
The Home Sales Predictor is a brand-new set of prediction data that dives into the number of presentations created and the correlated number of U.S. home sales. This data is provided by MoxiWorks with insights from their MoxiPresent product.