4 Real Estate Market Trends To Watch in 2021
One of the biggest economic anomalies of the COVID-19 era is how the real estate market has been able to sustain its growth during such an unprecedented time. While other areas of the economy have been dragged down, the real estate market has continued to flourish. But what is in the cards for the rest of the year? Here are four real estate market trends to watch in 2021.
Low Inventory of Homes: During the beginning of 2021, the inventory of available homes for sale in Central Florida and across the US dropped to historic lows. The good news for prospective buyers is that this number has started to increase in recent months. While inventory tends to peak in the late spring, the summer months have seen an increase in available homes. However, despite the small gains over the last few months, inventory is still generally low in most regions. This low inventory translates to a market that is favorable to sellers.
Intense Buying Competition: Knowing that the inventory of available homes is low, it also stands to reason that the competition to get into a new home is fierce. Many families are also looking to make a move as lifestyles have shifted dramatically during the ongoing pandemic. Together, these factors have contributed to intense buying completion and the proliferation of bidding wars. In many markets, it is not enough to simply make an offer. Prospective home buyers are learning that they often must bid well over the asking price. Some buyers are sweetening their offer by waiving contingencies or offering to buy the home with cash.
Price Appreciation: As sellers realized that the competition was there, they responded by raising the selling price. Price appreciation has been a constant in 2021 throughout the country. In addition to the low inventory of homes on the market, the continued rock-bottom interest rates have also fueled this price appreciation. As home values continue to rise, more people are looking at this market as a viable investment opportunity that will hold throughout an economic crisis.
Rising Equity Levels: The significant jump in price appreciation has also contributed to a rise in home values across the US. This means that homeowners are now sitting on more wealth in their homes in the form of equity. Homeowners can now tap into this equity to reach other financial goals. Whether that be to help a child pay for college, to pay off debt, or to finally start that major home renovation, this equity gives homeowners more flexibility with their personal finances.
Understanding the major real estate trends of 2021 can help you to make an informed decision when it comes to timing the sale or purchase of your next home.