Typically, market activity and prices fall off in the fourth quarter as demand drops and inventory becomes depleted. Despite record-low inventories (down 58% from a year ago), both sales and prices finished the year with extreme momentum. Year over year December sales were up 17% and higher levels of year-end new pending sales carried over into higher January closed sales. Heading into 2020, demand was high. It was pushed to an extreme as avoiding COVID had us spending most of the last year in our homes.
The role of the home has expanded to include home office, school room, and recreation center. The additional requirements pushed record numbers of buyers into the market at a time when inventory levels and interest rates were near historic lows.