Wow! U.S. housing market sizzles, despite pandemic

Lalaine C. Delmendo | October 01, 2020

It was an amazing second quarter.  New home sales were 43.2% up on the year.  U.S. homebuilder sentiment is now at its highest for 35 years.  Moves to the suburbs are adding to house buying pressure, with shifts to lower-tax locations, and continued low interest rates, magnifying the ongoing U.S. housing boom.

Us house price indices 10 cities

The S&P/Case-Shiller seasonally-adjusted national home price index rose by 4.29% during the year to Q2 2020 (3.62% inflation-adjusted) –up from the previous year’s 3.25% growth.

House prices increased 2.17% during the latest quarter (2.29% inflation-adjusted), according to S&P/Case-Shiller.

House prices continue to rise in all of the country’s 20 major cities, according to Standard and Poor’s, with Phoenix posting the highest increase of 8.96% during the year to Q2 2020, followed by Seattle (6.5%), Tampa (5.89%), Charlotte (5.74%), Cleveland (5.4%), Minneapolis (5.39%), and San Diego (4.98%). More moderate house price rises were seen in Portland (4.25%), Atlanta (4.2%), Miami (4.03%), Denver (4.02%), Los Angeles (3.91%), Washington (3.54%), Boston (3.51%), Las Vegas (3.33%), Detroit (3.07%), and Dallas (3.06%). New York saw minimal house price growth of 1.67%, as well as San Francisco (1.45%), and Chicago (0.6%).

The Mountain region had the highest house price increases of 7% y-o-y in Q2 2020, followed by East South Central (6.01%), East North Central (5.61%), South Atlantic (5.6%), West North Central (5.41%), and Pacific (5.13%), according to the FHFA. More modest house price rises were registered in West South Central (4.78%), New England (4.61%), and Middle Atlantic (4.49%).

The median sales price of new homes sold fell by 4.34% y-o-y in August 2020, to US$312,800, according to the U.S. Census Bureau.  For existing homes, the median price was up by 11.4% to US$310,600 in August 2020 from a year earlier, according to the National Association of Realtors (NAR). August’s price increase marks the 102nd consecutive month of year-over-year gains.

Demand continues to rise strongly. Existing home sales rose by 10.5% y-o-y to a seasonally adjusted annual rate of 6 million units in August 2020, according to the National Association of Realtors (NAR). Likewise, new homes sold soared 43.2% y-o-y to a seasonally-adjusted annual rate of 1,011,000 units in August 2020, according to the US Census Bureau.

US house prices

Construction activity remains weak, despite this. In August 2020, building permits authorized for new housing units fell by 0.1% y-o-y, according to the US Census Bureau. Housing starts were up 2.8% while completions declined 2.4%.

“Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” said Lawrence Yun, NAR’s chief economist. “To assure broad gains in homeownership, more new homes need to be constructed.”

The U.S. economy shrank by an amazing annual rate of 32.9% in Q2 2020, following a y-o-y fall of 5% in Q1 - the steepest decline on record dating back to the 1940s. The U.S. economy is expected to shrink by 6.6% this year, the first contraction in 11 years, according to the IMF. The unemployment rate fell to 10.2% in July 2020, after registering a record high of 14.7% in April 2020, but remains far higher than the average unemployment rate of 4.4% from 2015 to 2019.

The story of the U.S. housing bust

The last housing crash began in Q2 2006. There was a 33.3% fall in the S&P/Case-Shiller composite-20 home price index from Q2 2006 to Q4 2011. Phoenix registered the biggest drop (-54.7%) among the twenty largest metro areas, followed by Miami (-50.5%), Detroit (-43.3%), San Francisco (-40.8%), Los Angeles (-40.1%), and San Diego (-39.7%).

HOUSE PRICE CHANGE (%)
US Cities Housing boom (Jan 1996-Mar 2006) Housing crash (Apr 2006-Dec 2011) Housing recovery, boom (Jan 2012-Dec 2019) Q2 2020 (y-o-y change)
New York 172.58 -24.45 25.57 1.67
Los Angeles 265.49 -40.06 74.25 3.91
Chicago 96.84 -33.47 31.73 0.60
Phoenix 182.59 -54.73 82.21 8.96
San Diego 247.66 -39.68 68.74 4.98
Dallas - -7.53 71.21 3.06
San Francisco 226.59 -40.82 105.19 1.45
Detroit 71.99 -43.31 81.69 3.07
Boston 152.49 -16.38 51.08 3.51
Seattle 134.22 -23.97 95.56 6.50
Composite-10 192.25 -33.52 55.22 2.80
Composite-20 - -33.31 60.52 3.47
Sources: S&P, Global Property Guide

The U.S. housing market started to recover in the second half of 2012. In 2013, the S&P/Case-Shiller composite-20 home price index soared 13.5%. House prices continue to rise in the following years, albeit at a much slower pace. The S&P/Case-Shiller composite-20 home price index rose by 4.4% in 2014, by 5.5% in 2015, by 5.4% in 2016, by 6.2% in 2017, by 4% in 2018, and by 2.8% in 2019.

Nationwide home sales rising, amidst falling interest rates

Existing home sales (which include single-family homes, townhomes, condominiums and coops) stood at a seasonally adjusted annual rate of 6 million units in August 2020, up strongly by 10.5% from a year earlier, according to the National Association of Realtors (NAR).

By region:

  • In the Northeast, existing home sales rose by 5.7% in August 2020 from a year earlier, to an annual rate of 740,000 units.
  • In the Midwest, existing home sales rose by 9.3% in August 2020 from a year earlier, to 1.41 million units.
  • In the South, existing home sales rose strongly by 13% to 2.6 million units in August 2020 from a year earlier.
  • In the West, existing home sales increased 9.6% y-o-y to 1.25 million units in August 2020.

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” says Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

US new houses sold

Likewise, new homes sold soared 43.2% y-o-y to a seasonally-adjusted annual rate of 1,011,000 units in August 2020, according to the US Census Bureau.

First-time homebuyers accounted for about 33% of total sales in August 2020, down from 34% in the previous month but up from 31% a year ago, according to NAR. In addition, all-cash sales were 18% of all transactions in August 2020, slightly down from 19% a year earlier. Individual investors, who account for many cash sales, purchased 14% of homes in August 2020, at par with the previous year.

Residential properties typically stayed on the market for 22 days in August 2020, sharply down from 31 days a year earlier, according to NAR. About 69% of homes sold in August were on the market for less than a month.

Sentiment at record high, partly due to suburban shift

U.S. homebuilder sentiment increased to 83 in September 2020, up from the previous year’s 68 - the highest reading in the survey’s 35-year history, as many people move away from big cities due to the pandemic, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). A reading of 50 is the midpoint between positive and negative.

An increasing exodus from high-tax to low-tax states, due to the Tax Cuts and Jobs Act (TCJA), has buoyed housing demand further.

“The suburban shift for home building is keeping builders busy, supported on the demand side by low interest rates,” said NAHB Chief Economist Robert Dietz. “In another sign of this growing trend, builders in other parts of the country have reported receiving calls from customers in high-density markets asking about relocating.”

However, developers are now worried about the continued surge in costs and delays for building materials, particularly lumber.

Lumber prices soared more than 170% since mid-April 2020, after lumber producers shut down in March and April as the pandemic hit the country.

US residential construction

Despite strong demand, residential construction activity remained weak during the first eight months of 2020, partly due to rising materials costs caused by pandemic-related restrictions. In August 2020 (at seasonally adjusted annual rate):

  • Housing starts: 1,416,000 units, up 2.8% from a year earlier
  • Housing completions: 1,233,000 units, down 2.4% from a year earlier
  • Housing permits: 1,470,000 units, down slightly by 0.1% from a year earlier

During the previous boom peaked at almost 2,000,000 completions in 2006, but crashed to 584,900 units in 2011.

The total number of existing homes available for sale fell by 18.6% y-o-y to 1.49 million units in August 2020, according to NAR. Existing homes inventory was at 3 months supply in August, down from 4 months supply a year ago. On the other hand, the seasonally-adjusted inventory of new houses for sale at the end of August 2020 was 282,000 - equivalent to about 3.3 months of supply, sharply down from 5.5 months of supply a year earlier, according to the U.S. Census Bureau.

Will foreclosures start to rise?

Foreclosure filings, which include default notices, scheduled auctions, and bank repossessions, were down 44% in the first half of 2020 from a year earlier at 165,530 properties, and down by 90% from a peak of 1,654,634 properties in H1 2020, according to ATTOM Data Solutions.

Antebian noted that foreclosures are expected to rise. “Distressed property volume is almost guaranteed to increase significantly…because millions of Americans missed their mortgage payments in June and will continue to because of unemployment.”

The foreclosure rate was 0.12% of all housing units in the U.S. in the first half of 2020, down from 0.36% in 2019, 0.47% in 2018, 0.51% in 2017, 0.7% in 2016 and from the peak of 2.23% in 2010. Delaware had the highest foreclosure rate in the country in H1 2020, at 0.28% of all housing units with a foreclosure filing, followed by New Jersey (0.25%), Illinois (0.24%), Maryland (0.21%), and Connecticut (0.18%).

US deliquency rate

Likewise, the delinquency rate on single-family mortgages fell to 2.49% in Q2 2020, from 2.56% in Q2 2019, 3.2% in Q2 2018 and 3.66% three years ago, according to the US Fed.

Interest rates falling again

In September 2020, the Federal Reserve left the fed funds rate unchanged at 0% to 0.25%, after cutting it from a target range of 1% to 1.25% in March 2020 to buoy economic activity amidst the coronavirus pandemic. In its recent meeting, the Fed indicated that it intends to hold the key rate to near zero until the country’s labour market has fully recovered and the inflation rate has risen to 2%.

US interest rates

The country is currently still down 11.5 million jobs since February, while the annual inflation rate was 1.3% in August 2020. Claims for unemployment benefits have started to decline, but remain more than four times higher than the pre-coronavirus level.

As a result, mortgage interest rates are also falling again.

  • The average interest rate for 30-year fixed rate mortgages (FRMs) was 2.94% in August 2020, down from 3.62% in August 2019 and 4.55% in August 2018.
  • The average rate for 15-year FRMs was 2.48% in August 2020, down from 3.08% a year earlier and 4.02% two years ago.
  • The average rate for 5-year adjustable rate mortgages (ARMs) fell to 2.91% in August 2020, from 3.36% in August 2019 and 3.87% two years earlier.

Buoyed by falling interest rates, mortgage debt outstanding rose by 4% y-o-y to US$16.28 trillion in Q2 2020 from a year earlier, following annual growth of 3.75% in 2019, 3.56% in 2018, 3.81% in 2017 and 3.43% in 2016, according to the U.S. Federal Reserve System. One- to four-family residences accounted for about 69.4% of the total amount of mortgage loans outstanding in Q2 2020.

US outstanding mortgage debt

The size of the mortgage market was equivalent to about 73.6% of GDP in 2019, down from more than 77% in the past five years, and far lower than the 100.1% of GDP in 2009, based on Global Property Guide estimates.

Rents continue to rise, vacancy rate falling

Rising rents are another sign of healthy economic fundamentals. The median asking rent in the U.S. rose by 2.5% y-o-y to US$1,033 per month in Q2 2020, according to the U.S. Census Bureau - the second highest level after the record monthly rent of US$1,041 the previous quarter.

US median asking rent

By region:

  • In the Midwest, the median asking rent soared 13.8% y-o-y to US$907 per month in Q2 2020.
  • In the West, the median asking rent rose strongly by 10.6% to US$1,502 per month in Q2 2020 from a year earlier.
  • In the South, the median asking rent rose by 4.8% y-o-y to US$990 per month in Q2 2020.
  • In the Northeast, the median asking rent fell slightly by 1.8% in Q2 2020 from a year earlier, to US$1,279 per month.

Median rents were more or less static from 2008 to 2014, according to the U.S. Census Bureau. However since 2015, rents have risen at least as fast as house prices.

US rental vacancy

The nationwide rental vacancy rate fell to 5.7% in Q2 2020, down from 6.6% in the previous quarter and from 6.8% a year earlier, based on figures by the U.S. Census Bureau. It was the lowest level since Q2 1984.

The West had the lowest rental vacancy rate of 3.8% in Q2 2020, followed by the Northeast (4.2%), and the Midwest (6.8%). The South had the highest rental vacancy rate of 7.4% over the same period.

US house price rents

Homeownership rate rising sharply

After three years of growth, homeownership continues to rise in the first half of 2019, despite the continued rise in property prices. Homeownership rate in the U.S. stood at 67.9% in Q2 2020, up from 65.3% in the previous quarter and 64.1% a year earlier, according to the U.S. Census Bureau. In fact it was the highest level since Q2 2008.

US home ownership rate

By region:

  • In the Midwest, the homeownership rate was 71.4% in Q2 2020, up from 69.2% in Q1 2020 and 68% in the previous year. It was the highest level since Q3 2009.
  • In the South, the homeownership rate stood at 71.1% in Q2 2020, a sharp improvement from 67.6% in the previous quarter and 66% in Q2 2019.
  • In the Northeast, the homeownership rate was 63.3% in Q2 2020, up from 62.4% in the previous quarter and 61.2% a year ago.
  • In the West, homeownership rate rose to 62.6% in Q2 2020, from 60.1% in the previous quarter and 59.3% a year earlier.

The TCJA: who are the winners?

President Donald Trump signed a landmark tax law (known as the Tax Cuts and Jobs Act or TCJA), the largest overhaul of the U.S. tax code in over 30 years, effective January 1, 2018. The law included a massive reduction of the corporate tax rate from 35% to 21%. But it also reduces the mortgage interest deduction cap, increases standard deductions, but restricts state and local tax deductions.

US gdp inflation

Two years after, it seems that the positive effect of increased disposable income outweighs the loss of tax benefits. Based on a recent study conducted by the Tax Policy Center, about 65% of U.S. households got a tax cut while only 6% paid more.

  • Mortgage interest deduction cap decreases. The new law caps the deduction threshold, which helps homeowners lower their taxable income, on new homes at the first US$750,000 of a loan from the original US$1 million.
  • Standard deduction increases. The new law raises the standard deduction for all taxpayers to US$12,000 for single filers and to US$24,000 for joint filers. This implies that it may no longer be better for some households to itemize the mortgage interest deduction since it would be lower than their standard deduction.
  • The state and local tax (SALT) deduction restricted. The new law caps the SALT deduction at US$10,000 of property value, individual income, and sales taxes. This will have the greatest impact on high-income households since about 93% of households earning US$200,000 to US$300,000 annually claim the SALT deduction, compared with only 39% of households earning US$50,000 to US$75,000.

Higher-income households reap the biggest benefits from the new law since their tax rates were significantly reduced. Based on income bracket:

Household income % of households who got a tax cut
Under US$30,000 32.1%
US$30,000 – US$50,000 69.1%
US$50,000 – US$75,000 81.7%
US$75,000 – US$100,000 86.6%
Over US$100,000 89.5%
Sources: Tax Policy Center, MarketWatch

The TCJA’s US$10,000 limitation on deductions for state and local taxes appears to have accelerated relocations from high-tax states like California, New York, Illinois, and New Jersey to low-tax and no-tax states such as Colorado, Idaho, Florida, Texas, Utah, and Nevada. This added more housing demand and put more pressure to the already tight housing market.

Plunging economy, ballooning deficit

The U.S. economy shrank by a whopping annual rate of 32.9% in Q2 2020, following a y-o-y fall of 5% in Q1, amidst social distancing restrictions and lockdowns. It was the steepest decline on record dating back to the 1940s.

The world’s biggest economy is expected to shrink by 6.6% this year, the first contraction in 11 years, based on IMF estimates.

The federal budget deficit is projected to surge to US$3.3 trillion in 2020, more than triple the shortfall recorded in 2019, mainly driven by the government’s massive spending and stimulus aids on pandemic relief, according to the Congressional Budget Office (CBO). The deficit is expected to reach about 16% of GDP this year, the highest level since 1945.

US unemployment

As a result, the federal debt will climb to about 98% of GDP this year and will surpass the size of the U.S. economy in 2021, according to the CBO. The CBO said that the fiscal imbalance has not been seen in the U.S. since the end of World War II.

Nationwide inflation stood at 1.3% in August 2020 – the highest level since March 2020 but still far lower than the Fed’s target of 2%.

The labour market shows some signs of improvement. The unemployment rate dropped to 10.2% in July 2020, after registering a record high of 14.7% in April 2020. But it remains far higher than the country’s average unemployment rate of 4.4% from 2015 to 2019.

Foreign buyer interest in the U.S. is falling.

Foreign homebuyers purchased 154,000 U.S. properties from April 2019 to March 2020, down by 16% from a year earlier, according to NAR’s 2020 Profile of International Transactions in U.S. Residential Real Estate. Likewise, the value of properties purchased by foreigners during the same period dropped 5% to US$74 billion. The Chinese buyers accounted for more than 20% of all foreign transactions, followed by the Canadians (12.8%), Mexicans (7.8%), Indians (7.3%), and Colombians (1.8%).

Six states in the U.S. see the strongest foreign buyer interest - Florida, California, Texas, Arizona, New Jersey, and Hawaii. Unfortunately most have been hit by coronavirus-related travel restrictions this year. But in all cases, the buoyant domestic market has more than outweighed any slowdown in foreign demand.

Florida

Florida’s housing market is buoyed primarily by foreign investors rather than local homebuyers. Typically, one in 5 foreign buyers in the US purchased their properties in Florida, according to NAR. About 41% of Canadian buyers, often referred to as snow birds, purchased in Florida.

“Many Canadians and other foreigners found Florida so enticing because of its lenient tax laws,” said NAR’s chief economist Lawrence Yun. “Additionally, many Florida metro areas have an inventory of cheaper properties, relatively speaking – a combination which makes the state a very popular destination.”

In August 2020, Florida’s median sales price for existing single-family homes rose by 13.2% y-o-y to US$300,000, according to Florida Realtors. Likewise, statewide median price for condo-townhouse properties soared 14.5% y-o-y to US$217,500 over the same period.

“Florida’s housing market continues to gain momentum and provide support for the state’s economy, even as we all remain vigilant in protecting our health, safeguarding our communities and trying to keep businesses going during the ongoing pandemic,” said 2020 Florida Realtors President Barry Grooms.

“Our homes have become more important than ever over the past few months as we’ve dealt with stay-at-home orders, working from home, helping children with remote education and more,” Grooms added.

Closed sales for single-family homes rose by 8.8% to 29,495 units in August 2020 from a year earlier, according to Florida Realtors. Likewise, sales for condos and townhouses increased 10.3% y-o-y to 11,100 units.

High-end properties are leading the resurgence of Florida’s housing market.

“Sales of single-family homes of $1,000,000 or more were up nearly 82% year-over-year, while sales in the $600,000 to $1,000,000-range were up almost 72%,” said Florida Realtors Chief Economist Dr. Brad O’Connor. “And, as was the case in the single-family category, condo and townhouse sales of $1,000,000 and above increased by 63.5% from last August, and sales in the $600,000 to $1,000,000-range rose by more than 71%.”

Florida is one of the most populated states in the United States. Many of its cities are heavily dependent on retirees, with residents aged 60 years and older comprising more than 20% of the population. In fact in Naples, they make up more than 61%, according to an article by Forbes.

Inventory was at a limited 2.3 months supply for single-family homes and at a 5.3 months supply for condos and townhouses in August 2020, according to Florida Realtors.

California

California is the most populous US state with more than 39.8 million residents, and the second most popular destination for foreign homebuyers, next to Florida. The state accounts for about 12% of all international purchases in the country every year. Pre-pandemic figures showed that about one-third of foreign purchases in California were made by Chinese citizens, followed by UK buyers (20%), and Indian and Mexican citizens (10% each).

Southern California had been particularly popular with Chinese parents hoping to send their children to American universities. However in the midst of a growing trade war between the US and China, exacerbated by the COVID-19 pandemic, overall Chinese investment in the US housing market has been falling since last year.

According to economist Gay Cororaton of NAR, Chinese purchases of residential properties in the U.S. fell sharply from US$32 billion in 2018 to just US$13.4 billion last year. And in the first half of 2020, Chinese real estate investment in the country comes to a standstill due to the pandemic.

“The challenge is, in the short term, we talk about the coronavirus, it’s travel restrictions. They can’t physically come to visit the property. I had people during the Chinese New Year who wanted to come here and look at properties, but they weren’t able to do it because of the outbreak in Wuhan,” said Jill Ji of Douglas Elliman, a US real estate firm.

Fortunately after months of decline, property transactions are rising again, thanks to robust domestic demand. In August 2020, existing single-family home sales in California rose by 14.6% y-o-y to a seasonally-adjusted annual rate of 465,400 units, according to the California Association of Realtors (CAR). The median number of days it took to sell a California home was 13 days in August 2020, sharply down from 23 days a year earlier.

The statewide median home price soared 14.5% y-o-y to reach a new record high of US$706,900 in August 2020, based on figures from CAR. Almost all major regions saw double-digit price increases from the previous year. San Francisco Bay Area registered the highest median price growth of 18.7% y-o-y in August 2020, followed by the Central Coast (16.4%), Southern California (12.9%), and Central Valley (12.2%).

“California’s strong housing recovery in terms of sales and price over the past few months is encouraging as motivated buyers are eager to purchase homes amid the lowest interest rates ever, which led to the fastest sales growth in a decade,” said 2020 CAR President Jeanne Radsick. “However, persistently low housing inventory will continue to push up home prices due to heavy buyer competition, which is starting to outweigh the benefits of record low interest rates and hamper housing affordability.”

Texas

Texas is another favorite destination for international investors, especially for Indian and Mexican homebuyers. The “Lone Star State” steadily represents about 9% to 12% of all US homes sold to foreign buyers. About 28% of buyers from Mexico bought homes in Texas last year. Texas is also a hotspot for buyers from India (13%), the UK (4%), China (3%) and Canada (3%).

However similar to the national trend, foreign property sales in Texas have fallen by double-digit figures last year. But aside from foreign investors, Texas is also a popular location for domestic buyers because it has no state income tax. These local investors kept the market afloat last year. During 2019, total homes sold in Texas rose by 4% to 357,238 units.

But in Q2 2020, total closed sales fell by 9.9% y-o-y to 91,970 homes, according to Texas Realtors, mainly due to the adverse impact of the pandemic, coupled with limited supply.

Statewide median home price rose modestly by 2.9% to US$252,000 in Q2 2020 from a year earlier, based on figures from Texas Realtors. In Dallas-Forth Worth-Arlington area, which accounts for almost 29% of the Texas market, the median price rose by 2.3% y-o-y to US$286,494 in Q2 2020. The median price also increased 2.2% to US$330,000 in Austin-Round Rock area, and by 2.4% to US$255,000 in Houston-The Woodlands-Sugar Land area.

Residential properties typically stayed on the market for a total 93 days in Q2 2020, up from 88 days in Q2 2019 and 87 days two years ago. Inventory was at a 3 months supply in Q2 2020, down from 3.9 months a year earlier.

Arizona

Arizona’s housing market remains tight, amidst strong population growth coupled with low housing supply. In the Phoenix Metro Area, the median sales price rose strongly by 16.1% y-o-y to US$325,000 in August 2020, according to the Arizona Regional Multiple Listing Service, Inc. (ARMLS). This is in line with the S&P/Case-Shiller index which showed that Phoenix saw the highest y-o-y house price growth during the year to Q2 2020.

In August 2020, total sales were up 1.7% to 8,878 units from a year earlier. New inventory increased 4.1% y-o-y to 9,825 units in August 2020. Despite this, total inventory was down 22.8% to 13,510 units over the same period.

“I think that we’re going to see a very active purchase market for the rest of 2020 and all of 2021,” said Andrew Grant-Godoy of Wells Fargo Home Lending. “People understand the great importance of having a house right now; a place where you can go to rest, a place where you can go and have space to have a family. Now that space is becoming home, school, workplace, and people understand that it’s very important to have one.”

Residential properties typically stayed on the market for 51 days in August 2020, down from 63 days a year earlier.

Arizona, especially its capital Phoenix, draws interest from foreign homebuyers because of its year-round sunny weather and warm temperatures. It is also known for its high-end spa resorts, vibrant nightclubs and Jack Nicklaus-designed golf courses. The Grand Canyon, recognized as one of the seven natural wonders of the world, attracts millions of visitors each year.

New Jersey

New Jersey is known for its 130 miles of coastline, spanning from Sandy Hook to Cape May. Its beautiful white-sand beaches and boardwalks draw hundreds of thousands of visitors every year – with many of whom decide to purchase a home later on. Particularly famous is the Jersey Shore because of its unique natural, residential, and cultural characteristics owing to its location by the ocean. New Jersey is also known for its Italian population and preserved Victorian buildings.

In August 2020, New Jersey’s median sales price for existing single-family homes soared 17.1% y-o-y to US$410,000, based on figures from the New Jersey Realtors. Likewise, statewide median price for condo-townhouse properties were up by 5.6% y-o-y to US$285,000.

Closed sales for single-family homes rose by 9.7% y-o-y to 9,691 units in August 2020 and by 2.1% to 2,410 units for condos and townhouses, according to the New Jersey Realtors. However during the first eight months of 2020, closed sales for single-family homes, condos and townhouses remained down by 6.3% and 14.6%, respectively.

The average days on the market for single-family homes was 52 in August 2020, down from 59 days a year earlier. Inventory was at a 3 months supply in August 2020, sharply down from 5.6 months in August 2019.

Hawaii

Hawaii is a world-renowned tourist destination, known for its beautiful islands lined with beaches of warm, white sand and green, lush flora. The state’s peace and serenity, beach life, golf courses, natural parks, and culture are simply irresistible for tourists and international buyers around the world.

In 2019, tourist arrivals rose by 5.4% y-o-y to a record 10.4 million people, following an almost 6% growth in 2018. Most homebuyers in Hawaii come from California, Arizona, China, Germany, Russia, Japan and Canada.

The statewide median sales price for single-family homes rose by 6% y-o-y to US$707,250 in August 2020, according to Hawai’i Realtors. Kauai saw the biggest price increase of 14.2% during the year to August 2020, followed by Hawaii county (11.4%), and Oahu (6.2%). In contrast, Maui registered a y-o-y price fall of 3.2%.

Oahu and Maui had the most expensive housing in Hawaii in August 2020, with median prices of US$839,000 and US$799,000, respectively.


Sources:

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