Today’s real estate market is insane. In the first half of 2021, realtors from all over the country report there being a huge surge of buyer activity although inventory could satisfy demand. However, according to top agent insights, the future of the housing market is looking a little different. These housing trends aren’t set in stone, but they’re a good indicator of what we could expect to see during the latter part of the year.
1. Buyers balk are astronomical prices
Housing prices have skyrocketed over the past 18 months and it doesn’t seem like it’s going to stop rising any time soon. These high prices are starting to give buyers sticker shock, so much so, 54.4% of agents say they have buyers back out of their contracts because of the inflated prices. This is most commonly seen in the Northeast and Mountain regions. It’s even happening in smaller towns and rural areas that have less than 100,000 residents.
2. Bidding wars come to a peak
During the fourth quarter of 2020, 52% of real estate agents said bidding wars in their market were becoming more and more common. That isn’t necessarily the case for the second part of 2021. According to 54% of real estate agents, bidding wars are at their peak right now, but as more houses come onto the market, those bidding wars are going to be few and far between.
Instead of properties receiving dozens of offers that the seller can sift through, agents say properties are only getting a small handful of offers. A seller could look at a few offers and use a net proceeds calculator to see how much of a profit they could make with each offer and choose the best one of the bunch.
3. Sellers list as health concerns diminish
As the COVID-19 vaccine continues to be administered to the public, agents are seeing increased activity among sellers. 32.9% of realtors say their clients aren’t so fearful of getting infected by the virus and they feel safe enough to finally put their homes on the market. This is great news for markets where inventory is slowly increasing.
4. New construction prices are volatile
Having a home built from scratch sounds like the way to go, right? You can have everything tailored to the way you like it. Unfortunately, the cost of a new construction home is probably going to be a lot more expensive than it was before the pandemic. This might be the reason why many people prefer getting metal construction over regular construction. Metal buildings built by a good construction firm (such as this Construction company in Houston, TX) typically use prefabricated metal panels that are less expensive than traditional building materials like bricks, concrete, or wood. In addition, these types of construction require less maintenance than traditional buildings because they are resistant to pests, rot, and mold. Nowadays, barndominium kits for sale are widely available, offering homeowners and builders an easy and affordable way to create durable, customizable homes.
From April 2020 to April 2021, the cost of lumber increased from $350 per thousand board feet up to $1,200 per thousand board feet. That’s an astounding 250% increase! The cost of lumber alone adds nearly $36,000 to the cost of a new single-family home. There are ways around it, however, you just have to find the right builders. There are companies such as Ware Design Build (www.waredesignbuild.com/custom-lake-home-builders-wisconsin/) and others that provide custom homes which are much more affordable than starting a house construction project from scratch by yourself. The market may be volatile right now, but it’s never the wrong time for you to have your dream home.
5. Cash buyers are king
Up until now, low mortgage rates helped many buyers swallow the higher home prices and the intense bidding wars. Now that the economy is improving, buyers know that these rates aren’t going to last forever and they’re trying to lock in those low rates now while they still can. Even though they may get a great rate, they are losing out to cash buyers because a seller usually chooses a cash offer instead of a financed offer. So, if you have seen a great property deal on sky hub or a similar listing site, you may want to make the move as fast as you can before a cash buyer closes the deal.
Conclusion
2021 is a tough time for those thinking about buying a home because there’s a lot of factors at play that’ll make buying more difficult. However, as more houses come onto the market, realtors are optimistic that the market will balance out and housing prices won’t increase by the double digits.
If you’re thinking about buying or selling, you’ll want to really consider your options and a realtor can definitely help.
