Making Sense of Tighter Housing Markets
Tighter housing markets and longer homeowner tenure – what does this mean for American
homebuyers and you?
American homeowners are hanging onto their properties for longer time periods and it’s
hurting would-be buyers. Tenure has increased at a steady rate and is one of the main reasons
there is a smaller number of homes for sale, driving prices to astronomical heights.
A study conducted by real-estate brokerage firm Redfin Corp. found the typical American
homeowner is holding onto their property for longer in 2020 than they did in 2019 – doing so
for 13 years, up from 12.8 the year before – and significantly longer than the average in 2010’s,
which was 8.7 years. The study also found one in four homeowning Americans has lived in the
same residence for 20 years or longer.
Metro areas show many of the same patterns and in 2020, homeowner tenure in these areas
rose more than they had in 2019, according to Redfin. There were exceptions, however, where
tenure fell, including in Charlotte, NC and in Sacramento, CA.
COVID-19 hasn’t discouraged buyers for looking for new homes however and has actually
driven up sales figures, reaching their highest level in 14 years. Changing habits, such as
working from home, online schooling, and other Pandemic-related ramifications, has
encouraged Americans to look for larger homes.
The Pandemic has given potential sellers pause despite the increased buyer interest for fear of
having strangers in their homes to view their property. Real estate agents say that COVID-19
has prompted many people to delay or cancel their plans to sell homes.
Furthermore, homeowners have been attracted by ultralow interest rates and see the appeal of
refinancing their current homes. They have also become reluctant to sell given the challenges
of finding a new home in a competitive market. As many homeowners are Baby Boomers, they
are also living longer due to medical advancements and do not want to leave their current
As a result, the shortage of available homes for purchase has increased. According to the
National Association of Realtors (NAR), November 2020 figures show there were 1.28 million
homes for sale, a 22% decrease from November 2019. Overall inventory is at its lowest in
The combination of the small number of homes for sale and the near record low borrowing
rates are shooting up home prices and creating fierce competition amongst homebuyers. NAR
found the November 2020 median existing home price increased 15% from the year before to
$310,800. The previous record was $300,000 last year.
Thinking of selling your Los Angeles coastal real estate or looking to buy? Please feel free
to contact us today, as we’d be happy to guide you in selling your Palos Verdes home or show
you available coastal real estate for sale in Los Angeles.