Throughout 2019 and 2020, housing inventory was at record lows. Despite the pandemic and high unemployment, home sales are outpacing new listings every month. Unless there are sellers forced to come to the market in 2021, this scenario should continue.
The driving force behind all of this is supply and demand. Millennials, in particular, are looking for homes, often their first one. Existing home listings and new home construction are just not keeping pace with the number of people looking to buy homes. Some even predict that the inventory of homes may soon be depleted.
Home prices have risen in response to the mismatch of supply and demand. Between September and October of 2020, the listing price of homes that sold rose 6.7%. That percentage is higher than the increases in the same period in 2019 and 2018.
If you plan to sell in the next three to five years, you might want to list sooner as home prices rise. No one knows how long home prices will continue to increase.
If you are planning to buy now may be your best time to do so. Home prices currently are lower than expected to be in the coming year, and interest rates on mortgages are still at historic lows.
It is uncertain yet which housing markets will prove to be the most popular. The number of people working from home has created a dissociation between home and the workplace. Often it no longer matters how far the office is from your home as the virtual office has become more popular. This situation has lead to a rising interest in homes located in more rural areas. Homes located in these areas appeal to buyers looking for more space.
The advice to homebuyers is to prepare. Days on the market for new listing are decreasing; therefore, buyers need to be prepared and to act quickly. The advice to both home sellers and home buyers is to speak with a real estate agent about your plans and get their insights.