The COVID-19 housing market has been defined by inventory shortages, record low mortgage interest rates, mind-boggling sales prices in relation to asking price, and absurdly quick turnaround. As is natural, many people are wondering when this hot streak ends; all good things must come to an end.
According to a report by Realtor.com, 10% of current homeowners intend to sell their homes this year, at affordable prices, 63% of whom have already begun the process; another 16% plan to sell their homes within the next 3 years. In a normal year, roughly 8% of homeowners attempt to sell their homes, so the report suggests a 25% increase in supply is coming soon; this translates to an additional 1.5 million homes. This influx of supply will go a very long way towards cooling the market down, as it’s largely been driven by supply shortages; shortages have enabled homes to sell for ridiculously high prices.
The national median list price increased by 16% between March 2020 and March 2021 to $350k, providing analysts with a clear snapshot of how bidding wars over scarce supply has been wildly lucrative for sellers; it doesn’t hurt that mortgage rates are sitting at 2.97% either. Most of the homes that will be coming onto the market appear to be priced below the $350k median price point, which suggests that the average price point will decrease with the influx of new properties to the market. Ultimately, it’s been a bumpy road for home buyers, but things are about in a way that will balance the playing field a little more.
At the Chernov Team we understand that knowledge is power and understanding market trends is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.
Massive Influx of New Properties to Housing Market Will Cool Housing Market Slightly
