Home Sales and Prices Pick Up: Historic Low Mortgage Rates and Low Inventory Create the Perfect Storm

Hannah Jay  |  January 12, 2021

Market Reports

Home sales rang in the new year by setting a new record. The average home sale price in Staten Island is now $625,311. This represents a 6% increase since last year when the average home sold for $588,997.
 
Mortgage interest rates have not sunk to record-breaking lows as well. The 30-year fixed-rate is now an astonishing 2.65%. One year ago, it was 3.9% in December.
 
There are other factors besides mortgage rates that have recently pushed home sale prices to the point they are at today. The number of homes for sale has also fallen to just 1,845 active listings. Of course, this includes pending listings as well so the true number of available homes is likely several hundred less.
 
The number of home sales has picked up ferociously since last year as well. In December, 564 homes sold in Staten Island. This is up by more than 100 from the previous month and up 40% from last year when 406 homes sold in December 2019.
 
The speed of home sales is picking up too, though more slightly. In December, the average home sold in 97 days compared to 103 days during the same period last year.
 

Seller’s Market: The Tipping Point

 
Months Inventory is at the lowest rate we have seen in years also. This is the amount of time it would take to sell all the inventory currently on the market. Currently, it would take just a little over 3 months to clear all 1,845 homes currently on the market. Last year, Months Inventory was over 5 months. Back in May, this figure peaked at almost 13 months.
 
In layman’s terms, we can coin this phenomenon as a “seller’s market.” The tipping point between buyer’s market and seller’s market is around 6 months. In October, this figure dropped to 4.5 months. This was the first time it fell below 6 months for the first time since January 2020, which was right before the pandemic lockdown.

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