It’s no secret that the coronavirus has changed our world. From the way we purchase groceries to our leisure choices, change is all around us. The real estate market is not excluded from that reality. Since the pandemic began, interest in real estate properties has dropped exponentially. We’re seeing record-low mortgage rates across the country as demand increases. The downside: inventory has never been lower. Even if developers are hard at work on building new properties, it’ll take some time until the inventory numbers are up again.
According to recent studies, as of July, housing inventory nationwide declined 32.6% year-over-year while newly listed properties declined 13.4%. This summer, homes stayed on the market for 18 fewer days than a year earlier. Florida Realtors Chief Economist Dr. Brad O’Connor said, “Several factors are playing into this renewed demand for housing but, by far, the most important factors are record-low mortgage interest rates and the release of all the pent-up demand from our derailed spring buying season.”
The sunshine state in particular has been drawing buyers since the pandemic began. According to Florida Realtors, pending sales of single-family homes were up 23.2% this June compared to last June, and new pending sales of condo-townhouse units are up 19.8% this year over last. Many are happening in the suburbs — a result of people fleeing the more agglomerated areas.
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Utah has also experienced this newfound reality. According to Deseret News, as of July, the Salt Lake City metro area has become the country’s third-most competitive housing market, due to an increasing number of prospective buyers searching amidst a decreasing supply. These and other reports are proof that the trend is happening around the country. Bidding wars are happening everywhere as buyers try to acquire their dream properties with such low inventory.
This surge of demand creates a rewarding market unlike anything we’ve ever seen, for both buyers and sellers. Sellers who are idly sitting in the current market are missing out on the opportunity to make a profitable sale as demand continues to rise. Some are afraid of putting their property on the market due to myths shared about the market’s current state, but buyers are currently outnumbering sellers. With so much demand and a low inventory, owners are bound to make a quick sale and a higher profit.
Buyers, on the other hand, need to take immediate action. Even though some states like New York are seeing prices drop, according to the NAR, prices have risen 7.7% since the pandemic began due to the low-record mortgage rates being offered. According to Freddie Mac, mortgage interest rates plummeted below 3% for the first time in 50 years. If a buyer finds a property of interest, they shouldn’t wait until a final decision.
This reality won’t be around forever. Even amidst so much uncertainty, we can clearly see a market that benefits both ends. Some economists claim that these numbers will remain strong for the next year, while others advise that this is a rare and short opportunity window. Whatever the case, one should not waste the opportunities presented.
Source: (Forbes)
