Still reeling from the financial hardships endured during 2020? You’re not alone. The good news for homeowners, however, is that current housing market conditions almost guarantees you’ll sell for a favorable price.
If you’re thinking of selling — especially if you’re selling for the first time — you’ll be hard pressed to find a better time under current market conditions!
Seller Hesitance Prompts Low Supply
Since the start of the COVID-19 pandemic, inventory has been extremely low in most markets. In fact, 91% of top real estate agents claimed inventory is lower than expected.
This is understandable, as selling a home can result in daily foot traffic in and out of your family home, and owners are extremely wary of bringing a deadly virus into their home.
While inventory is expected to pick up as vaccine distribution rates increase, sellers are still hesitant to enter the market. Most real estate agents believe owners in their market are still in planning mode, despite the favorable market conditions facing sellers should they decide to sell.
Strong Buyer Incentives Leads To Intense Demand
According to top real estate agents, buyers are far outweighing sellers in the market. What’s causing the surge of buyers? The answer boils down to 2 main incentives:
- Low mortgage rates make home costs more affordable
- Remote work / school encourages relocation
Mortgage rates reached a record low back in December, and, while these rates may be raising slowly, they’re still dramatically low in comparison to normal market conditions. Low rates help to make the homebuying process much more affordable, and 97% of top realtors claim low mortgage rates continue to boost buyer demand in their markets.
In addition, the shift the nation has taken from in-person work and school to remote work and school, which may be permanent for some, encourages relocations across the nation. Owners are now able to find cheaper accommodation away from major cities or move closer to their families now that commuting is no longer an issue. We may see another wave of relocations once the school year ends, as summer is always a popular time for parents to move.
This lack of supply to meet demand has risen home prices and sparked an increase of bidding wars across the country. While these trends are expected to continue in the next few months, the vaccine may eventually begin to close the gap between supply and demand, so sellers may want to jump on these favorable market conditions now.
The Eventual Impact of Vaccine Distribution
Back in 2020, real estate agents predicted that vaccine distribution would encourage more sellers to the market, however, only 22% of agents reported as much in 2021.
However, regions where vaccine distribution rates were the highest saw higher impacts of the vaccine. For example, the Northeast — one of the only places where the total population given at least one shot exceeded 25% (as of mid March) — comes in well above the national average, as 31% of agents saw an impact on their market due to the vaccine.
Theoretically, the higher the rate of vaccine distribution, the larger the effect on the market. This indicates that as vaccine distribution ramps up, so will supply. Don’t expect this to happen overnight however, as we likely won’t see a huge change until later in the year.