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      Today's Real Estate Market Explained Through 4 Key Trends

      Todays Real Estate Market Explained Through 4 Key Trends | MyKCM
       

      As we move into the second half of the year, one thing is clear: the current real estate market is one for the record books. The exact mix of conditions we have today creates opportunities for both buyers and sellers. Here’s a look at four key components that are shaping this unprecedented market.

      A Shortage of Homes for Sale

      Earlier this year, the number of homes available for sale fell to an all-time low. In recent months, however, inventory levels are starting to trend up. The latest Monthly Housing Market Trends Report from realtor.com says:

      “In June, newly listed homes grew by 5.5% on a year-over-year basis, and by 10.9% on a month-over-month basis. Typically, fewer newly listed homes appear on the market in the month of June compared to May. This year, growth in new listings is continuing later into the summer season, a welcome sign for a tight housing market.”

      This is good news for buyers who crave more options. But even though we’re experiencing small gains in the number of available homes for sale, inventory remains a challenge in most states. That’s why it’s still a sellers’ market, giving homeowners immense leverage when they decide to make a move.

      Buyer Competition and Bidding Wars

      Today’s ongoing low supply, coupled with high demand, creates a market characterized by high buyer competition and bidding wars. Buyers are going above and beyond to make sure their offer stands out from the crowd by offering over the asking price, all cash, or waiving some contingencies. The number of offers on the average house for sale broke records this year – and that’s great news for sellers.The latest Confidence Index from the National Association of Realtors (NAR) says the average home for sale receives five offers (seTodays Real Estate Market Explained Through 4 Key Trends | MyKCM 

      For buyers, the best way to put a compelling offer together is by working with a local real estate professional. That agent can act as your trusted advisor on what terms are best for you and what’s most appealing to the seller.

      Home Price Appreciation

      The competition among buyers is driving prices up. Over the past year, we’ve seen home price appreciation rise across the country. According to the most recent Home Price Index (HPI) from CoreLogic, national home prices increased 15.4% year-over-year in May:

      “The May 2021 HPI gain was up from the May 2020 gain of 4.2% and was the highest year-over-year gain since November 2005. Low mortgage rates and low for-sale inventory drove the increase in home prices.”

      Rising home values are a big part of why real estate remains one of the top sought-after investments for Americans. For potential sellers, it also means it’s a great time to list your house to maximize the return on your investment.

      A Rise in Home Values and Equity

      The equity in a home doesn’t just grow when a homeowner pays their mortgage – it also grows as the home’s value appreciates. Thanks to the jump in price appreciation, homeowners across the country are seeing record-breaking gains in home equity. CoreLogic recently reported:

      “…homeowners with mortgages (which account for roughly 62% of all properties) have seen their equity increase by 19.6% year over year, representing a collective equity gain of over $1.9 trillion, and an average gain of $33,400 per borrower, since the first quarter of 2020.”

      That’s a major perk for households to leverage. Homeowners can use that equity to accomplish major life goals or move into their dream homes.

      Bottom Line

      If you’re thinking about buying or selling, there’s no time like the present. Let’s connect to talk about how you can take advantage of the conditions we’re seeing today to meet your homeownership goals.

      3 Charts That Show That This Isn't a Housing Bubble

       

      3 Charts That Show This Isnt a Housing Bubble | MyKCM
       

      With home prices continuing to deliver double-digit increases, some are concerned we’re in a housing bubble like the one in 2006. However, a closer look at the market data indicates this is nothing like 2006 for three major reasons.

      1. The housing market isn’t driven by risky mortgage loans.

      Back in 2006, nearly everyone could qualify for a loan. The Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers’ Association is an indicator of the availability of mortgage money. The higher the index, the easier it is to obtain a mortgage. The MCAI more than doubled from 2004 (378) to 2006 (869). Today, the index stands at 130. As an example of the difference between today and 2006, let’s look at the volume of mortgages that originated when a buyer had less than a 620 credit score.

      3 Charts That Show This Isnt a Housing Bubble | MyKCM 

      Dr. Frank Nothaft, Chief Economist for CoreLogic, reiterates this point:

      “There are marked differences in today’s run up in prices compared to 2005, which was a bubble fueled by risky loans and lenient underwriting. Today, loans with high-risk features are absent and mortgage underwriting is prudent.”

      2. Homeowners aren’t using their homes as ATMs this time.

      During the housing bubble, as prices skyrocketed, people were refinancing their homes and pulling out large sums of cash. As prices began to fall, that caused many to spiral into a negative equity situation (where their mortgage was higher than the value of the house).

      Today, homeowners are letting their equity build. Tappable equity is the amount available for homeowners to access before hitting a maximum 80% combined loan-to-value ratio (thus still leaving them with at least 20% equity). In 2006, that number was $4.6 billion. Today, that number stands at over $8 billion.

      Yet, the percentage of cash-out refinances (where the homeowner takes out at least 5% more than their original mortgage amount) is half of what it was in 2006.

       

      .3 Charts That Show This Isnt a Housing Bubble | MyKCM

      3. This time, it’s simply a matter of supply and demand.

      FOMO (the Fear Of Missing Out) dominated the housing market leading up to the 2006 housing bubble and drove up buyer demand. Back then, housing supply more than kept up as many homeowners put their houses on the market, as evidenced by the over seven months’ supply of existing housing inventory available for sale in 2006. Today, that number is barely two months.

      Builders also overbuilt during the bubble but pulled back significantly over the next decade. Sam Khater, VP and Chief Economist, Economic & Housing Research at Freddie Macexplains that pullback is the major factor in the lack of available inventory today:

      “The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”

      Here’s a chart that quantifies Khater’s remarks:3 Charts That Show This Isnt a Housing Bubble | MyKCM 

      Today, there are simply not enough homes to keep up with current demand.

      Bottom Line

      This market is nothing like the run-up to 2006. Bill McBride, the author of the prestigious Calculated Risk blog, predicted the last housing bubble and crash. This is what he has to say about today’s housing market:

      “It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while because Millennials need houses. Prices will keep rising for a while because inventory is so low.”

      The Right Expert Will Guide You Through This Unprecendented Market

       

      The Right Expert Will Guide You Through This Unprecedented Market | MyKCM

      In a normal market, it’s good to have an experienced guide coaching you through the process of buying or selling a home. That person can advise you on important things like pricing your home correctly or the first steps to take when you’re ready to buy. However, the market we’re in today is far from normal. As a result, an expert isn’t just good to have by your side – an expert is essential.

      Today’s housing market is full of extremes. Mortgage rates hovering near record-lows are driving high buyer demand. On the other hand, an absence of sellers is creating record-low housing inventory. This imbalance in supply and demand is leading to a skyrocketing rate of bidding wars and more houses selling over their asking price. This is driving home price appreciation and gains in home equity. These market conditions aren’t just extreme – they can be overwhelming. Having a trusted expert to coach you through the process of buying and selling a home gives you clarity, confidence, and success through each step.

      Here are just a few of the ways a real estate expert is invaluable:

      • Contracts – We help with the disclosures and contracts necessary in today’s heavily regulated environment.
      • Experience – We’re well-versed in real estate and experienced with the entire sales process, including how it’s changed over the past year.
      • Negotiations – We act as a buffer in negotiations with all parties throughout the entire transaction while advocating for your best interests.
      • Education – We simply and effectively explain today’s market conditions and decipher what they mean for your individual goals.
      • Pricing – We help you understand today’s real estate values when setting the price of your home or making an offer to purchase one.

      A real estate agent can be your essential guide through this unprecedented market, but truth be told, not all agents are created equal. A true expert can carefully walk you through the whole real estate process, look out for your unique needs, and advise you on the best ways to achieve success. Finding the right agent should be your top priority when you’re ready to buy or sell a home.

      So, how do you choose the right expert?

      It starts with trust. You’ll have to be able to trust the advice your agent is going to give you, so make sure you’re connected to a true professional. An agent can’t give you perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in this unique market. A true professional expert can, however, give you the best possible advice based on the information and situation at hand, helping you make the necessary adjustments and best decisions along the way. The right agent – the professional – will help you plan the steps to take for success, advocate for you throughout the process, and coach you on the essential knowledge you need to make confident decisions toward your goals. That’s exactly what you want and deserve.

      Bottom Line

      It’s crucial right now to work with a real estate expert who understands how the market is changing and what that means for home buyers and sellers. If you’re planning to make a move this year, let’s connect so you have someone who can answer your questions, give you the best advice, and guide you along the way.

       

      3 Things To Prioritize When Selling Your House

      3 Things To Prioritize When Selling Your House | MyKCM

      Today’s housing market is full of unprecedented opportunities. High buyer demand paired with record-low housing inventory is creating the ultimate sellers’ market, which means it’s a fantastic time to sell your house. However, that doesn’t mean sellers are guaranteed success no matter what. There are still some key things to know so you can avoid costly mistakes and win big when you make a move.

      1. Price Your House Right

      When inventory is low, like it is in the current market, it’s common to think buyers will pay whatever we ask when setting a listing price. Believe it or not, that’s not always true. Even in a sellers’ market, listing your house for the right price will maximize the number of buyers that see your house. This creates the best environment for bidding wars, which in turn are more likely to increase the final sale price. A real estate professional is the best person to help you set the best price for your house so you can achieve your financial goals.

      2. Keep Your Emotions in Check

      Today, homeowners are living in their houses for a longer period of time. Since 1985, the average time a homeowner owned their home, or their tenure, has increased from 5 to 10 years (see graph below):

      3 Things To Prioritize When Selling Your House | MyKCM

      This is several years longer than what used to be the historical norm. The side effect, however, is when you stay in one place for so long, you may get even more emotionally attached to your space. If it’s the first home you purchased or the house where your children grew up, it very likely means something extra special to you. Every room has memories, and it’s hard to detach from that sentimental value.

      For some homeowners, that connection makes it even harder to separate the emotional value of the house from the fair market price. That’s why you need a real estate professional to help you with the negotiations along the way.

      3. Stage Your House Properly

      We’re generally quite proud of our décor and how we’ve customized our houses to make them our own unique homes. However, not all buyers will feel the same way about your design and personal touches. That’s why it’s so important to make sure you stage your house with the buyer in mind.

      Buyers want to envision themselves in the space so it truly feels like it could be their own. They need to see themselves inside with their furniture and keepsakes – not your pictures and decorations. Stage, clean, and declutter so they can visualize their own dreams as they walk through each room. A real estate professional can help you with tips to get your home ready to stage and sell.

      Bottom Line

      Today’s sellers’ market might be your best chance to make a move. If you’re considering selling your house, let’s connect today so you have the expert guidance you need to navigate through the process and prioritize these key elements.

       

       

      The Home Owners Association

       

      The Home Owners Association is something all condominium or co-operative buildings are certain to have. Gated and Golf communities have one too. Some love them and some loathe them. Who likes to be 'controlled'? I am a huge fan of the H.O.A.....the PRACTICAL, honest, ethical, proactive, empathetic kind.

       

      The other night I was on a ZOOM call for the H.O.A. meeting for our weekend home....yes, we have a weekend home in Greenwich, CT that has HOA and I am SO thankful for it. We bought in a 'gated community' something I thought I'd never do.... ours has a 10-acre minimum lot size which allows it to feel much more like a countryside experience. Here are some of the advantages I find most valuable:

      1.  We have a 'doorman' service - a security guard - that accepts packages, deliveries, and does a whole host of other things that are difficult to accommodate when you are not a full-time resident. It's sheer bliss. And we don't have to manage the staffing. The HOA and management do.

      2.  Consistency of quality. Most neighborhoods have outstanding zoning requirements. Buildings and home community HOA's are often much better equipped to enforce the consistency of quality in design, maintenance, landscaping, etc. More importantly, they have effective recourse for those that break the 'rules'. And they enforce them. Laws are useless without honest enforcement.

      3.  A well-run building or housing community with consistent quality attracts people who value and appreciate this. Most have pride in their homes and neighborhood/building. Our 'community' is over 1,400 acres in size so the consistency is remarkably impressive. This too keeps valuations healthy.

      4.  Every time I visit Nantucket I am blown away by the incredibly consistent design/landscaping/building code, etc. This fuels enjoyment - especially visually - for all, owners, renters, and visitors. It is unusual. This is good too for retail, restaurants, and commerce too. I used to have a weekend home in a town that allowed certain homes to go into deep decay....it brought the entire neighborhood down. It detracted visitors. It depressed valuations for all. A community with a good HOA protects you from town/city negligence.

      5.  A good HOA always focuses on the greater good, that which benefits the majority of homeowners. Working in the interests of one or two owners at the expense of others is terrible. I like dead trees removed. Hallways cleaned. Lightbulbs replaced. Lawns mowed. Lobbies updated. Staffing well trained and dressed. Almost all other owners do too. Yes, management companies and superintendents do all this work, but the oversight of a good HOA can make a huge difference.

      6.  A good HOA forces you to meet and get to know your neighbors. I like a sense of community where I live both in the city and the country.

       

      Naturally, I could write a long list of some of the negatives of poorly run, corrupt HOA's. It is always wise to not only understand the 'house rules' of an apartment, condo, or home with an HOA, but also how those rules are being enforced, the quality of the financials, and meeting notes. Do they meet consistently? Do they care?

       

      The other day I visited a building where I used to live in and was on the board. The lobby's flowers were mostly dead. When I was on the Board I would NEVER have allowed that to happen.... maybe I am old-fashioned, but these things matter to me....and to most of the homeowners and their visitors too!

       

      Have a WONDERFUL Wednesday!

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        How to Buy a Home Even Though Your Credit Stinks

        If you’ve always imagined owning a home but don’t think you have the necessary credit history to pull it off, you’re not alone. Owning a home has long been a part of the fabled American dream, but in recent years, the prospect of homeownership has become increasingly out of reach for many Americans. Between problems with the housing market and the nation’s overall economy, financial struggles have resulted in low credit scores and little savings. Fortunately, there are ways to buy a home even if your credit isn’t the greatest.

        Person Holding Black Ceramic Teapot  Image source: Pexels

        Face Your Credit Demons 

        When you don’t have an excellent financial history, checking your credit report is often the last thing you want to do. Reviewing one negative item after another can make anyone feel depressed, overwhelmed, and hopeless. However, your best bet is to just take a deep breath and jump in — you’ll feel proud of yourself once you do! Carefully review your report to find out what’s dragging your score down. If it’s been a while, you may be surprised that some things have dropped off your report due to the seven-year reporting limit. Doing what you can to start repairing your credit now will pay off in the future. 

        Get To Know Your Local Market

        The first step in any housing search is getting familiar with your local housing market. Do some online searches and check out some real estate sites to get an idea of what housing prices are like in your area and understand what you can afford. Consider a variety of neighborhoods and be honest with yourself about your wants versus needs in a future home.

        Understand Your Mortgage Options

        Specific mortgage terms vary from lender to lender, but there are a few major types of mortgage loans that you should be aware of. Conventional mortgages, which are not backed by the government, tend to require the highest credit scores and down payment amounts of all the mortgage types. Government-insured loans, such as FHA and VA loans, typically have a lower credit threshold and require a much lower down payment. Depending on your circumstances,
        you may also qualify for a first-time buyer program or down payment assistance resources.

        Lock-In a Low-Interest Rate

        Whichever type of mortgage you choose, it’s important to secure the lowest possible interest rate to keep your monthly payments — and overall amount due —as low as you can. Unfortunately, the lower your credit score, the higher risk you pose to a lender, which usually means a higher interest rate.

        To reduce your interest rate despite your credit history, you could offer larger cash down payment, or ask a relative with good credit to co-sign the loan with you. If those aren’t options, you may consider paying for mortgage points. When you buy mortgage points, you pay the mortgage lender a certain amount upfront in exchange for a lower interest rate. Many factors go into determining whether mortgage points are worth the cost. A mortgage points calculator may
        help you figure out if buying mortgage points is a wise choice in your particular circumstances. Be prepared for your journey to homeownership to take some time. Continue improving your credit score and saving what you can, and don’t rush into a bad deal that will only hurt your credit further. With patience, research, and planning, you can realize your dream of buying a home.

        If you’re ready to take the first steps towards purchasing a home, the Lyons Group can help you navigate the process. Contact one of our experienced agents at 617-901-4500 or lyonsgroup@compass.com today.

        What It Means To Be in a Sellers' Market

        What It Means To Be in a Sellers Market | MyKCM

        If you’ve given even a casual thought to selling your house in the near future, this is the time to really think seriously about making a move. Here’s why this season is the ultimate sellers’ market and the optimal time to make sure your house is available for buyers who are looking for homes to purchase.

        The latest Existing Home Sales Report from The National Association of Realtors (NAR) shows the inventory of houses for sale is still astonishingly low, sitting at just a 2-month supply at the current sales pace.

        Historically, a 6-month supply is necessary for a ‘normal or ‘neutral’ market in which there are enough homes available for active buyers.

        :What It Means To Be in a Sellers Market | MyKCM

        When the supply of houses for sale is as low as it is right now, it’s much harder for buyers to find homes to purchase. As a result, competition among purchasers rises and more bidding wars take place, making it essential for buyers to submit very attractive offers.

        As this happens, home prices rise and sellers are in the best position to negotiate deals that meet their ideal terms. If you put your house on the market while so few homes are available to buy, it will likely get a lot of attention from hopeful buyers.

        Today, there are many buyers who are ready, willing, and able to purchase a home. Low mortgage rates and a year filled with unique changes have prompted buyers to think differently about where they live – and they’re taking action. The supply of homes for sale is not keeping up with this high demand, making now the optimal time to sell your house.

        Bottom Line

        Home prices are appreciating in today’s sellers’ market. Making your home available over the coming weeks will give you the most exposure to buyers who will actively compete against each other to purchase it.

        10 Credit Mistakes That Could Cost Buyers Their Dream Home

        A few years ago, in a similar market to the one we are currently experiencing, we managed to get buyers into a contract on the home of their dreams. It took a lot of effort; they were blown out in many multiple offer situations before we finally managed to ink a deal. Needless to say, they were ecstatic.

        A week later, as they pulled up to the property to meet with the inspectors, I noticed they were driving a brand-new BMW. “You borrowed that car, right?” I queried. 

        The husband proudly proclaimed, “No — it’s ours — now that we know we are going to have a garage, we bought a car to go in it.” 

        Speechless for a moment, I gathered my thoughts and then said, “I’m sorry to say this, but you no longer have a garage. In fact, you no longer have a house.”

        Unfortunately, their new car purchase pushed their debt ratio over the limit, and they no longer qualified for the mortgage required to purchase the home. That was a day of bitterness for the buyers and of reckoning for me. 

        It marked a new phase in my career: a commitment to make sure I changed the messaging we provide to buyers before they begin looking for homes so that mistakes like this would never happen again.

        We now schedule a meeting with all our buyers before opening the door to any prospective home. Although we cover many topics in our time together, we pay special attention to credit do’s and don’ts and potential financial mistakes to avoid once they get into contract.

        Here are the top 10 things we now advise them never to do once they begin looking to buy a home:

        1. Don’t apply for new credit

        Most people understand this, but some get so excited about getting new digs they start setting up lines of credit with furniture stores, home improvement centers and the like. 

        Every time a buyer applies for new credit, their credit will be pulled by a potential creditor or lender, and they run the risk of immediately losing points on their credit score.

        2. Don’t make any large purchases

        We advise our clients to hit their “patience button” and avoid any large purchases until escrow has closed. Even though we explain this to all of our buyers upfront, we constantly get pinged with questions such as, “The appliances I want just went on sale — I can save hundreds. Are you sure I cannot buy now?” 

        We explain that if they have significant enough reserves that they can pay cash, go ahead. If they need to buy with credit, they need to hold off.

        3. Don’t pay off collections or ‘charge offs’

        This point might seem counterintuitive, but let your clients know that if they want to pay off old accounts, do it through escrow. Once the debt is paid, make sure they get a “letter of deletion” from the creditor.

        4. Don’t close credit card accounts

        If you close credit accounts, it might appear that your debt ratio has gone up. Closing credit cards will affect other factors in the score, including credit history. Lenders use active credit lines to establish creditworthiness, so they need to stay active. 

        Once, our clients preemptively assumed that it would be best to have a little credit exposure as possible, so they closed all their credit lines before applying for a loan, only to discover it was the worst thing they could have done.

        5. Don’t max out or overcharge credit card accounts

        Tell them to keep credit card balances below 30 percent of their limit during the loan process. If a buyer pays down balances, do it across the board. If possible, keep credit card spending to a minimum during the homebuying process.

        6. Don’t consolidate your debt

        When consolidating debt onto one or two cards, it appears that the buyer is “maxed out” on that card and will therefore be penalized.

        7. Don’t change bank accounts

        Do not close accounts, open new accounts or change banks altogether. This sends off all kinds of warning signals to loan underwriters.

        8. Don’t deposit cash into your bank accounts

        Instruct your buyer to talk to their lender before making any cash deposits. If the money is from a family member, it must be accompanied by a gift letter. 

        If it is cash from any other source, the lender will need to verify its’ source before it hits their account. In the same way, buyers should not arbitrarily transfer money from one account to another.

        9. Don’t co-sign loans with anyone

        This is never a good idea to begin with, but while your buyers are getting a loan of their own, it’s forbidden.

        10. Don’t do anything weird

        Instruct your buyers to avoid things that will cause a red flag to be raised by the scoring systems, including changing their name or address, missing payments, making late payments or changing spending patterns.

        It’s hard enough to get into contract these days — make sure your buyer does not financially self-destruct along the way.                       

        As seen in INMAN Real Estate News  Written by: Carl Medford is the CEO of The Medford Team.

        How Smart Is It to Buy a Home Today?

        How Smart Is It to Buy a Home Today? | MyKCM

        Whether you’re buying your first home or selling your current house, if your needs are changing and you think you need to move, the decision can be complicated. You may have to take personal or professional considerations into account, and only you can judge what impact those factors should have on your desire to move.

        However, there’s one category that provides a simple answer. When deciding to buy now or wait until next year, the financial aspect of the purchase is easy to evaluate. You just need to ask yourself two questions:

        1. Do I think home values will be higher a year from now?
        2. Do I think mortgage rates will be higher a year from now?

        From a purely financial standpoint, if the answer is ‘yes’ to either question, you should strongly consider buying now. If the answer to both questions is ‘yes,’ you should definitely buy now.

        Nobody can guarantee what home values or mortgage rates will be by the end of this year. The experts, however, seem certain the answer to both questions above is a resounding ‘yes.’ Mortgage rates are expected to rise and home values are expected to appreciate rather nicely.

        What does this mean to you?

        Let’s look at how waiting would impact your financial situation. Here are the assumptions made for this example:

        • The experts are right – mortgage rates will be 3.18% at the end of the year
        • The experts are right – home values will appreciate by 5.9%
        • You want to buy a home valued at $350,000 today
        • You decide on a 10% down payment

        How Smart Is It to Buy a Home Today? | MyKCMHere’s the financial impact of waiting:

        • You pay an extra $20,650 for the house
        • You need an additional $2,065 for a down payment
        • You pay an extra $116/month in your mortgage payment ($1,392 additional per year)
        • You don’t gain the $20,650 increase in wealth through equity build-up

        Bottom Line

        There are many things to consider when buying a home. However, from a purely financial aspect, if you find a home that meets your needs, buying now makes much more sense than buying next year.

         

         

        The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

        We believe every family should feel confident when buying and selling a home.

        Are There Going To Be More Homes To Buy This Year?

        Are There Going to Be More Homes to Buy This Year? | MyKCM

        If you’re looking for a home to purchase right now and having trouble finding one, you’re not alone. At a time like this when there are so few houses for sale, it’s normal to wonder if you’ll actually find one to buy. According to the National Association of Realtors (NAR), across the country, inventory of available homes for sale is at an all-time low – the lowest point recorded since NAR began tracking this metric in 1982. There are, however, more homes expected to hit the market later this year. Let’s break down the three key places they’ll likely come from as 2021 continues on.

        1. Homeowners Who Didn’t Sell Last Year

        In 2020, many sellers decided to pause their moving plans for a number of different reasons. From health concerns about the pandemic to financial uncertainty, plenty of homeowners decided not to move last year.

        Now that vaccines are being distributed and there’s a light at the end of the COVID-19 tunnel, it should bring some peace of mind to many potential sellers. As Danielle Hale, Chief Economist at realtor.com, notes:

        “Fortunately for would-be homebuyers, we expect sellers to return to the market as we see improvement in the economy and progress against the coronavirus.”

        Many of the homeowners who decided not to sell in 2020 will enter the market later this year as they begin to feel more comfortable showing their house in person, understanding their financial situation, and simply having more security in life.

        2. More New Homes Will Be Built

        Last year was a strong year for home builders, and according to the National Association of Home Builders (NAHB), 2021 is expected to be even better:

        “For 2021, NAHB expects ongoing growth for single-family construction. It will be the first year for which total single-family construction will exceed 1 million starts since the Great Recession.”

        With more houses being built in many markets around the country, homeowners looking for new houses that meet their changing needs will be able to move into their dream homes. When they sell their current houses, this will create opportunities for those looking to find a home that’s already built to do so. It sets a simple chain reaction in motion for hopeful buyers.

        3. Those Impacted Financially by the Economic Crisis

        Many experts don’t anticipate a large wave of foreclosures coming to the market, given the forbearance options afforded to current homeowners throughout the pandemic. Some homeowners who have been impacted economically will, however, need to move this year. There are also homeowners who didn’t take advantage of the forbearance option or were already in a foreclosure situation before the pandemic began. In those cases, homeowners may decide to sell their houses instead of going into the foreclosure process, especially given the equity in homes today. Lawrence Yun, Chief Economist at NAR, explains:

        “Given the huge price gains recently, I don’t think many homes will have to go to foreclosure…I think homes will just be sold, and there will be cash left over for the seller, even in a distressed situation. So that’s a bit of a silver lining in that we don’t expect a massive sale of distressed properties.”

        As we can see, it looks like we’re going to have an increase in the number of homes for sale in 2021. With fears of the pandemic starting to ease, new homes being built, and more listings coming to the market prior to foreclosure, there’s hope if you’re planning to buy this year. And if you’re thinking of selling and making a move, doing so while demand for your house is high might create an outstanding move-up option for you.

        Bottom Line

        Housing demand is high and supply is low, so if you’re thinking of moving, it’s a great time to do so. There are likely many buyers who are looking for a home just like yours, and there are options coming for you to find a new house too. Let’s connect today to see how you can benefit from the opportunities available in our local market. 

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