The real estate market is expected to do very well in 2021, with mortgage rates hovering at historic lows and projected to remain favorable by experts. One challenge, however, is the lack of homes available for sale. Recently, the National Association of Realtors (NAR) released their Existing Home Sales Report, which shows that the inventory of homes for sale is currently at an all-time low. The report explains:
Total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million). Unsold inventory sits at an all-time low 1.9-month supply at the current sales pace, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019. NAR first began tracking the single-family home supply in 1982.
What Does This Mean for You?
If You’re a Buyer—
Be patient during your home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be prepared to make a competitive offer, and know that a shortage in inventory could mean you’ll enter a bidding war. Calculate just how far you’re willing to go to buy the home you love, getting estimates from your lender of the financial implications of any offer you make.
If You’re a Seller—
Realize that, in some ways, you’re in the driver’s seat. When there’s a shortage of an item at the same time there’s a strong demand for it, the seller is in a good position to negotiate the best possible terms. Whether it’s the price, moving date, possible repairs, or anything else, you’ll be able to request more from a potential purchaser at a time like this—especially if you have multiple offers. Don’t be unreasonable, but understand that you probably have the upper hand.
The housing market will remain strong throughout 2021. Know what that means for you, whether you’re buying, selling, or doing both. If you want to know how to plan, give us a call!