Whether you are buying or selling, it still makes sense to be in the real estate game.
It could all start on the neighborhood gossip vine: “They got how much for their house?!” Buyers and sellers are out in force, and you may be tempted to join them. However, the real estate market has taken on an unprecedented shape with record low mortgage rates, high demand, low inventory, and the uncharted waters of a world-wide pandemic lingering around us. So, here’s a basic breakdown of what to expect if you want to buy or sell real estate in 2021.
Buying Requires Flexibility
Low interest rates and indicators that we are not in a housing market bubble make this a fine time to buy. In fact, you can likely afford a higher home price than before because lower rates equal more affordable mortgage payments.
However, a buyer’s journey is complicated by limited inventory and high quality buyers right now. This year, the buying process is taking approximately 96 days, compared to 91 in 2020. With more competition for homes, buyers are providing higher down payments, paying above asking price (in about 34% of sales), sometimes paying in cash, and waiving contingencies like inspections.
So, if you are looking to buy while rates are low, expect to make concessions in order to look competitive alongside these other buyers.
Sellers Should Prepare for a Swift Sale
Sellers, this is your kind of real estate market. The national average for offers on a home is up to five this year, while the average time on the market is down to just 17 days. With an overall low inventory of homes compared with demand, 42% of homes are selling above asking price.
As a seller, that means you must prepare for things to progress quickly once your home hits the market. Since you’ll likely have several options, it will simply be a matter of choosing the best one. Talk to your real estate agent about elements that can distinguish the best quality offers from the others.
We would definitely call this a seller’s market. However, in a time of economic fluctuation, the national average for home prices is up 11.3% this year, which demonstrates that real estate doesn’t necessarily fluctuate with the stock market. Whether you are buying or selling, it still makes sense to be in the real estate game.
Author’s note: All figures have been pulled from Brian Buffini’s 2nd Biannual Real Estate Report for 2021