As we approach the one-year anniversary of the stay-at-home orders, quarantine restrictions, and state-wide curfews, we reflect on all of the ways that the global pandemic shattered the world. We hadn’t seen the US Economy suffer this badly since the Great Depression. While the pandemic affected every aspect of our lives and economy, the residential real estate market has proven to be extremely resilient in the face of adversity and uncertainty.
In March 2020, and the following months, the real estate market was bleak compared to the traditional spring market we have grown accustomed to, due to a steep decline in inventory and purchases as a result of widespread stay-at-home orders, a rise in unemployment and increased financial uncertainty.
The housing market was kept afloat thanks to the low interest rates, incentivizing homebuyers, in particular, millennials, looking to purchase their first home. Low interest rates and pandemic-fueled desire for homeownership and space have increased demand within housing markets while listings and inventory remain low.
In a year filled with darkness, the housing market provided a glimmer of light. According to the National Association of REALTORS®️ (NAR), January 2021 brought 6.69 million in sales (up 23.7% year over year), with a median sales price of $303,900 (up 14.1% year over year).
In spite of the pandemic and economic decline that plagued 2020, most cities across the United States experienced a seller’s market, a trend we expect to continue for the foreseeable future. Limited supply conditions and high demand contribute to the residential housing market’s fast-paced and competitive environment.
Those who purchased in 2020, or are looking to purchase in 2021, can attest to the residential housing inventory: Rapid sales, multiple offers, and offers over the asking price.
The imbalance of low inventory and high demand, makes it increasingly difficult for homebuyers to get their offer accepted in today’s real estate market. We have compiled a list of tips to navigate the competitive real estate climate as a buyer and better position yourself to get your offer accepted.
Obtain a pre-approval letterWhether looking to buy a home in a buyer’s or seller’s market, it is important to secure a pre-approval letter from one of our loan officers.
Make a strong first offerThe days of placing an offer below asking price are behind us, as homebuyers can expect a dozen or so offers will come in at asking price or higher to stand out amongst the competition. Consider a higher down payment and avoid asking for a seller’s assist (if finances permit).
Consider expanding your search parameters and criteriaIn a highly competitive market, compromise may be inevitable. Either in location, size, price, or must-haves, homebuyers may want to be more flexible and open-minded if looking to purchase in 2021.
Be patient and persistentWhile it is a difficult time to purchase a home, accept the current market conditions and remain patient and persistent with your home search.
Home buying success begins with an understanding of the current real estate landscape and trends coupled with thorough research on your desired market. Please call any of our experienced loan officers, today, to get your home buying process started.