The author is a freelance journalist and Google News PR specialist. He can be reached at contact@sitetrail.com. -- Ed.
Since the early days of the COVID-19 pandemic, we have seen the sale of homes increase to the point of being labelled an all-out buying spree. The housing market is red-hot as limited supply is resulting in record high sales.
According to S&P CoreLogic, prices have increased at the fastest rate since 2005, while the Census Bureau has found that single-family home sales have begun to slow down to 5.9% through April. While it has slowed down, it still remains above what was deemed normal before the pandemic. This market boom is said to rival the 2000s housing bubble.
In addition to this boom, the U.S. covers areas from lumber prices to the realtor-to-listing ratio. We will unpack this further.
Changes in the US Housing Market
To start with the most obvious, buyers are experiencing a shortage of available homes. This nationwide shortage has forced prices to skyrocket. As a result, the shortage means that there are more real estate agents seeing their real estate license put to the test as they compete for the available homes. Research has found that there were only 1.16 million homes available in the U.S. at the end of April, with the National Association of Realtors recording 1.48 million members in the same period.
This lack of inventory is another change to consider, however it has begun to increase since April due to a pickup in construction to meet these demands. In the meantime, the available houses are selling incredibly fast at record prices. Further research has found that it takes only 17 days for a home to go from listed to sold.
Perhaps one of the biggest changes to note is the fact that people are migrating to cheaper cities as a result of the soaring property prices. When mortgage prices were low, we saw many Americans move from the densely populated cities to the more spacious suburbs. With the pandemic forcing people to work from home, space became a necessity, and we began to see even more people move from the city to the suburbs of less populated states. According to research, for every four people that moved into a state, one left. This ratio changed to 7:1 in Florida and 5:1 in Texas.
While the most obvious solution to this problem is to build more houses, the construction industry is facing severe bottlenecks in addition to reduced supply of lumber. Another key factor hindering this process is a lack of space. All of these factors together make it difficult to build more properties, and even when new properties are built, they are snatched up in record time.
The Process of Buying a Home has Changed
With property becoming all the more scarce, many people have opted to buy homes that they have not yet seen in person. In fact, it has been reported that 63% of the people bidding on homes had not yet seen them.
In addition to this, the money saved by moving to low-tax states has seen household dynamics changed to the point where families are able to afford having one parent stop working while other people have chosen to retire early.
As mentioned, many people are looking to move to the spacious suburbs, however, this does not mean that cities such as San Francisco and New York City are suffering as a result. As the inventory in these populated areas have begun to increase, the prices remain stable. This implies that even though people are leaving the city, there are still a lot of people looking to move into these populated spaces. This means that the perceived available housing in cities is more of an illusion as people continue to move between the different locations
The 5 Hottest Housing Markets
While all of these facts and figures are impressive, the question we are asking ourselves is which American housing markets are the hottest. According to our research, the most rapidly growing markets include Austin in Texas, Raleigh in North Carolina, Stamford in Connecticut, Boise City in Idaho and Columbus in Ohio. Another housing market to watch is Provo in Utah. This is because of their location and potential for long term economic growth.