Think back. Way way back to March 2020 when we were all just learning about COVID.
Back then, the current 6 realities about real estate right now did not exist. We were more concerned that the real estate market would crash. The uncertainty made it difficult to predict and even imagine what would happen to real estate. This uncertainty was quickly clarified as we moved through into 2020. Then 2021 when we look back.
Here are 6 realities about real estate right now.
Reality 1 | Inventory remains at an all time low
Inventory of active listings for sale remains extremely low right now. But the demand for detached and single-family property has outstripped supply. The reality about real estate is that there are fewer homes for sale than we have witnessed in two decades.
Reality 2 | Interest rates remain extremely low.
One of the first big headlines of the pandemic was when interest rates were slashed big time. Many Buyers took advantage by refinancing their homes. Many invested in a second property. As months passed, the continued low-interest rates motivated investors and prospective buyers to enter the market. We witnessed upward pressure on pricing with double digits increasing values across the country.
Reality 3 | For buyers competition is huge
It’s not just locals in your market moving around. The shift to remote work has allowed many buyers to move out and into bigger spaces. Often these high-wage earners were submitting offers 20-30% above the property’s asking price. Especially if they had sold their home and received larger than expected sales dollars.
Reality 4 | Homes sell very, very quickly and many above the asking
When there are fewer listings and plenty of buyers, your dream home may be a blink-and-you’ll-miss-it opportunity.
For buyers, it means that you should be preapproved (not just prequalified) in order to get your offer considered. For sellers, you may have a little more leeway on things like conditions and contingencies.
Reality 5 | Prices increased on average in 2021 by 18%
All of the above factors have pushed prices higher in most areas. In fact, 96% of cities saw home prices rise as you can see in the charts between Sept and December at a record pace.
Reality 6 | Folks are leaving big cities
The big tech companies continue to order employees to work remotely during the pandemic (and perhaps indefinitely). These employees are opting for larger spaces at more affordable prices. These homes can be found outside of the big urban centers. So if you don’t have to pay the premium to live close to your workplace, why not live somewhere else? In addition to space and better value, you buyers are witnessing a more desirable lifestyle pace.
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