It’s hard to find silver linings related to the COVID-19 pandemic. But, if you are a homeowner who is looking to sell your home, you’re likely going to be able to sell your property and potentially make some money in the process.
That’s because home prices went up everywhere at the end of 2020. And when we say everywhere, we mean everywhere.
According to data from the National Association of REALTORS® (NAR), existing home prices rose in all 183 metropolitan areas that are tracked in the fourth quarter of 2020. And in 88 percent of those markets, there were double digit price gains.
BY comparison, 115 of the metropolitan areas saw price growth in the third quarter.
“The fourth quarter of 2020 presented circumstances ripe for home price increases,” Lawrence Yun, NAR chief economist told CNN. “Mortgage rates reached record lows, thereby driving up the demand. At the same time, inventory levels also reached record lows, leading to grim inventory conditions of insufficient supply in the fourth quarter.”
The national average mortgage payment on an existing single-family home increased by $20 per month from $1,020 to $1,040 from the fourth quarter of 2019. This means the national average family income needed to afford a home also increased by nearly $1,000, from $48,960 in the fourth quarter of 2019 to $49,908 in the fourth quarter of 2020.
The Metro areas that saw the biggest increase were mostly in the Northeast corridor of the country, as well as in Florida. Neither location is surprising, but there were also big gains in Washington and Idaho, which may be a little less expected.
Bridgeport, Conn. saw the biggest increase, with prices jumping 40% in one year. Pittsfield, Mass. (32%), Naples, Fla. and Atlantic City, N.J. (both 30%) were the others that jumped by such a large margin.
Increases between 24% and 29% were identified in Crestview, Fla. (29%), Barnstable, Mass (29%), Boise City, Idaho (27%), Spokane, Wash. (24%), Kingston, N.Y. (24%), and Binghamton, N.Y. (24%)
What’s noticeable about this list is it appears the attraction for the purchase of existing homes seems to be hottest in areas that are within driving distance to a major metropolitan area but may be far enough out to provide a more affordable option, or are part of a vacation destination, which could mean buyers are thinking of these homes as potential investment properties.
The other possibility, Yun said, is that with more and more companies allowing employees to work from home, either part-time or full-time, these locations are more desirable to own a home, as you can be away from the hustle and bustle and still do your job.
It’s a true have “your cake and eat it too” situation for homebuyers.
Not surprisingly, the most expensive areas of the county to live were in California, specifically the Silicon Valley. Here, the median home sale price in San Jose is $1.4 million. San Francisco was the only other city with a median price north of a million bucks ($1.14 million), but Anaheim is getting closer ($935,000).
Rounding out the top 10 most expensive metropolitan areas are Honolulu ($902,500), San Diego ($740,000), Los Angeles ($688,700), Boulder, Colo. ($661,300), Seattle ($614,700), Nassau County, N.Y., or the suburban part of Long Island ($591,600) and Boston ($579,100).
Boulder was the only Metro in the top 10 that didn’t see a double-digit percentage price increase.
While this has been a boon for those looking to sell, the tipping point for buyers might not be far off, and prices will have nowhere to go but down.
“The average, working family is struggling to contend with home prices that are rising much faster than income,” Yun told CNN. “This sidelines a consumer from becoming an actual buyer, causing them to miss out on accumulating wealth from homeownership.”