If you believe we’re on the brink of a “housing bubble” that will soon burst, you may have to rethink that. But there are many factors that suggest that isn’t the case. For example:
- Housing supply is low.
– 1.9 months current supply; 6 months supply is normal. - Housing demand is high.
– The economy is improving.
– Interest rates remain low. - Rampant foreclosures are not expected
– Currently, a vast amount of homeowners have a large amount of equity.
Experts are expecting prices will continue to increase and rates will remain relatively stable through 2022.
Plenty of Home Buyers Continue to Enter the Market
According to the 2021 Realtors Confidence Index Survey, real estate agents across the country described their market based on how many buyers were looking and how many sellers were selling. The map below shows how hot the buyer traffic looks in your state.
But the Market Needs More Homes to Be Listed for Sale
Conversely, the survey showed that the number of homes actively listed for sale in March 2021 was down over 50% as compared to 2020. The next map shows how the majority of markets look slower when it comes to the number of homes available for sale. Buyers will have a harder to find their dream home.
How Fast Are Homes Selling in 2021?
In 2020, existing homes were typically on the market for 21 days. That’s over two weeks less than was the case in 1999. But in 2021, homes sell even faster than that. This year, homes stay on the market for an average of 18 days. This is great news for sellers… but buyers need to stay on their toes. Wait too long, and you may be a loser!
What About Foreclosures?
Early projections showed that up to 500,000 homeowners across the country might face foreclosure in 2021. Post-pandemic foreclosures are ticking up, but only on vacant and abandoned properties. What do more foreclosures mean for home buyers? Increases in foreclosures could mean a increase in available supply plus some discounts.
Is the Housing Market Going to Crash?
It’s unlikely that the housing market will crash in the next two years. Home prices have already seen a 16.2% increase in 2021 which is more than two times the original predictions. That reflects a strong economy. And, as long as new buyers keep entering the market and there aren’t enough homes for sale to meet demand, home sales and prices will continue to rise. This should keep the market healthy.
What Does This Mean for Home Buyers and Sellers?
Buyers will have to be smart and quick. With more buyers than sellers, you’ll be up against some heavy competition. But there are some bright points. Mortgage rates will likely still be low through 2021. Experts also anticipate that housing inventory will climb in the second half of 2021, which means less competition.
Sellers might want to put your house on the market sooner while inventory is still low. There are plenty of buyers out there. Also, it is a very good idea to work with an experienced agent to set the best home price and find the right buyer. With an expert by your side, you should have no problem selling your house at a great price this year.
Even with all the data available to us, the housing market is hard to predict. To buy or sell with confidence, it really pays to have a trusted professional on your side. Get an experienced Real Estate Agent on your team, leverage their expertise and you’ll be in the best position to have your interests protected.