As more money is being spent on real estate than ever before, the booming market is on pace to shatter records this year, according to a recent CoreLogic report.
The value of transactions has skyrocketed despite sales volumes continuing a relatively normal growth trend. However, sales are still below what they were during the 2000s boom. In the first quarter of 2021, the report noted that $750 billion was spent on 1.91 million transactions, which was substantially less than the 2.22 million transactions in the third quarter of 2005.
The recent surge is due mainly to an increase in home prices. As of June 2021, the S&P CoreLogic Case-Shiller Index was 41% above its peak value in 2005. The upswing could also be attributed to the increased number of sales in higher-priced areas.
“The combination of appreciation and relocation to expensive areas has already created over 1.25 trillion in transactions through the first half of 2021,” said Thomas Malone, economist for CoreLogic. “Could 2021 be the first year that transactions surpass $2 trillion?”