Given the high housing prices, lack of available housing, and low mortgage interest rates, the seller's market is expected to last until the rest of 2021, even if not in the foreseeable future.
When the number of houses for sale exceeds the number of people who want to buy them, a buyer's market appears. In addition, real estate prices in the buyer's market often fall, and real estate tends to be sold for a few days longer. Sellers usually lower their asking prices in a highly competitive market to attract more buyers and complete sales faster. In addition, in this case, suppliers are more inclined to bargain.
However, a seller's market is a market where the supply of houses is less than the demand, which gives sellers an advantage. House prices in the seller’s market often rise, real estate sales are faster, and bidding wars are more likely. So what is the point of all this? If this is your first time looking for a property or first contact with a seller’s market, you should know how to trade to save purchase costs.
In many parts of the country, 2020 will undoubtedly create a seller's market. The remainder of 2021 will be a seller's market, but many potential buyers are asking whether this trend will continue or whether the forecast is about to change.
Is there evidence that a seller’s market will continue in 2021?
The short answer is that the rest of 2021 is likely to be a seller's market. Existing home sales will increase by 9% in 2021, while new home sales will increase by 21%. Home values have increased by 8.4% from a year ago, listed prices have increased by 15.4%, and the 30-year mortgage interest rate has remained slightly below 3%. Nonetheless, home sales are expected to increase, and as GDP grows and mortgage interest rates rise, home values may stabilize. On the other hand, due to the increase in buyers (first-time homebuyers) and the decrease in available housing inventory, a similar trend may follow for the remainder of 2021.
Nevertheless, it is expected that housing inventory will increase significantly in the near future, especially considering the increase in residential construction spending. In addition to giving buyers more bargaining chips, the increase in housing supply also gives them more affordable options.
When should we expect changes in the market?
Although the real estate market is not expected to undergo major changes until 2021, the economic recovery and the recovery of other industries will make it easier for individuals to buy houses and build new properties. However, low interest rates and current conditions are driving a lot of demand. However, a major shift may occur as early as 2022.
In 2020, mortgage interest rates are a successful way to attract buyers, but the lack of available houses and high demand have severely affected the country's housing affordability. Therefore, if homebuyers want to take advantage of today's low mortgage interest rates, they need to start looking for them earlier this year.