There are likely to be some remarkable headlines about real estate over the coming months. However, don’t be impressed by the headlines reporting year-over-year housing numbers for the next several months (March, April, May, and June). The data will most likely show incredible one-year increases.
While these year-over-year jumps can catch your eye, buyers should take these numbers with a grain of salt. In reality, the situation highlights a short-term quirk in the reporting of this data.
In essence, the increases will reflect a combination of two things. It will reflect sharply lower housing numbers resulting from last year’s market collapse due to the coronavirus pandemic and a following strong rebound. This will result in what will appear to be extraordinary growth.
For example, single-family home sales were anything but typical last spring. Instead of sales increasing, they fell sharply as a result of stay-at-home orders that virtually shut the real estate industry down.
This spring’s real estate market will bounce back with more normal seasonal sales increases. The percentage increase in sales will be astronomical – not because sales have skyrocketed, but instead because they will be compared to last year’s low numbers.
All in all, it’s important to keep this information in mind as we move into the coming months. Keep an eye out for incredible real estate headlines but don’t buy into it too quickly. In reality, the real estate market is finally back to normal.