Details Emerge about Unforeseen Shift in Real Estate Activity

For anyone who follows Memphis area real estate trends, this year has upended all expectations. Even following the declaration of the national pandemic emergency, the course of activity continued to follow an unpredictable path. Last Thursday, the National Association of Realtors® Newsroom revealed new details about the unforeseen shifts in the housing market. Normally, when the national economy sputters as profoundly as it has since to onset of the pandemic, it constitutes “a condition usually associated with slower home sales and lower home prices.” The opposite has come to pass on both counts.

The NAR’s key findings detail a market that has tilted toward more expensive—and more spacious—properties:

  1. Buyers have been seeking housing with more rooms, greater square footage, and additional yard space.
  2. Nationally, buyers who closed after March were willing to pay considerably more: an average 25% increase ($339,400 vs. $270,000) over the previous nine months.
  3. Eighty-seven percent of buyers financed their purchases. The median down payment was 12% (6%-7% for first-time buyers; 16% for repeat buyers).

The NAR statistics were in line with press accounts citing examples of bidding wars and all-cash buyers. Last Wednesday, readers of The Wall Street Journal’s print edition learned that although in the nine months preceding the pandemic, 14% of buyers had paid $500,000 or more, by June, that percentage had risen to 25%. Among leading reasons buyers expressed was a desire for extra space to accommodate “older adult relatives or young adults now living within the residence.” Not surprisingly, the post-March buyers were more likely to relocate to the suburbs.

It’s well-documented that Memphis area real estate activity usually slows after the spring-summer selling season peaks—but like just about everything else in turbulent 2020, the remainder of the year seems destined to defy the norm. At any rate, the evidence for what the Journal labels “surging demand that is pushing up home prices” should encourage area homeowners looking to sell. For buyers, it could also provide added motivation. WSJ quotes one recent Idaho buyer’s opinion: “every day you sit on the sideline you could be losing” as prices rise.

For a readout on the latest local Memphis area real estate activity, give me a call!

About Author
Tim OHare

Tim O'Hare has over 15 years experience working with executive leadership as a digital marketing and technology specialist. Tim relocated to Collierville, TN where he began his real estate career with a sphere of less than 10. In his first 18 months, he was Rookie of the Year at his brokerage and a member of the Multi Million Dollar Club. Tim realized the best way he could give back was to help others unlock their potential, so that they feel empowered to accomplish their personal and professional goals. His passion to learn, coach and give back to the community is what shapes him as a leader. He brings a strong competitive mindset and understands the commitment necessary to accomplish even the most audacious goals. Tim currently lives in Collierville with his wife Anna and 2 boys. He's a member of the Collierville Rotary and serves on the Board of Zoning Appeals for Collierville. Tim also sits on multiple committees at the Memphis Area Association of Realtors.

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