Long before deciding to enter the market, either buy or sell property, it’s always a good idea to see how your local real estate market is looking. Does it favor buyers or are sellers still on top?
You can research your local market to get a better idea of what the market is going to be like, but you should never take the market trends as a 100% guarantee. Regardless of what the market is doing, you should always take your finances and personal circumstances into consideration when deciding if you’re ready to buy or sell.
Housing market predictions for Fall 2021
Over the past 18 months, low mortgage rates have brought buyers out of the woodworks. As of August 24, 2021, they’re still below 3% for a 30-year fixed rate conventional mortgage! However, although buyers can use a home affordability calculator to get a good idea of how much house they can afford, it’s important to note that housing prices have increased by 3.9% on average and that number can change depending on certain variables:
Buyer activity remains competitive
Across the country, the housing market is on fire, thanks to those low mortgage rates. With so many buyers entering the market at once, houses still receive multiple offers (4 offers being the average), which contributes to higher housing prices. Despite this, it’s very likely that buyers will still be as competitive when submitting offers as they were at the start of the year.
Housing inventory cannot replenish fast enough
At the height of the pandemic, sellers were (understandably) hesitant about putting their homes on the market. Vaccine distribution has eased some of this hesitation and realtors are seeing more sellers venture out into the market. However, in many markets, houses can’t come on the market fast enough to satisfy demand. Why, a newly listed house is only on the market for 17 days on average before it’s sold! So buyers have to act fast!
New construction homes are more expensive
If someone was unable to find the home of their dreams, there was always the option to buy a new construction home and have it customized to their liking. This is still an option, but it’s going to cost the buyer a lot more today than it would have cost two years ago. The cost of materials have skyrocketed and the cost of lumber (for example) has increased by 250%; rising from $350 to $1,200 per thousand board feet. The increased cost of lumber alone can add $36,000 to the average cost of a new construction build. Yikes!
Cash buyers hold all the cards
You know how they say cash is king? That’s certainly the case when it comes to submitting an offer on a house – especially if there are buyers who have financial contingencies attached to their offers. For the traditional buyer who needs financing… winning a bid against the cash buyer is going to be difficult. A seller is much more likely to accept a cash offer because financing is guaranteed and there’s a high likelihood that the transaction will close much quicker than the traditional buyer.
2021’s housing market predictions are in
Making the decision to buy a new home or sell your property in any market isn’t something you’ll want to do on a whim. However when you have a better understanding of the market and where it’s heading, that decision may be easier to make. If you’re uncertain and need further insight, your best bet would be finding a trustworthy realtor and asking for their predictions regarding the local market. With their expert knowledge and advice, you can make the best decision for you and your family.