Whether you’re a prospective buyer or seller, it’s important to keep track of housing market trends and conditions before you dip your toes in the water — especially after such an unprecedented year for both real estate and the rest of the world.
In HomeLight’s Spring 2021 survey, top real estate agents gave their take on the current housing conditions and their predictions for the coming months, so keep reading to see what top trends were discovered from their insights.
The sellers market continues to increase in prevalence
Back in February 2020, 77% of real estate agents reported seller’s market conditions. This seemed like a strong majority at the time — until inventory drastically dropped and buyers surged to the market during the COVID-19 pandemic. Now in the first quarter of 2021, 97% of real estate agents reported a seller’s market.
Virtually everywhere in the country, sellers will have the upper hand. This will likely fade as inventory increases in the coming year, but most real estate agents don’t see the market trends turning on a dime.
Home prices are on the rise
What goes hand-in-hand with a rampant seller’s market? Raising home prices. Thanks to the severe lack of inventory, an overwhelming majority (91%) of real estate agents reported that inventory was lower than expected.
Demand for homes remains strong, while sellers remain wary to join the market. This has caused the price of homes to soar — a trend that will likely carry into the next 6 months. If you’re a prospective seller, it may be a good time to start selling your home if you want a high price.
Mortgage rates drive buyer demand and lead to more bidding wars
If you’re wondering what’s causing this buyer frenzy, the answer is quite simple: low mortgage rates. While mortgage rates have risen in recent weeks, they’re still drastically low in comparison to normal market standards.
Many buyers are now trying to take advantage — even if it means jumping into a market where sellers hold the upper hand. Approximately 94% of real estate agents say bidding wars are on the rise or at their peak in their respective markets, so buyers should be prepared for a fight if they wish to take advantage of these low mortgage rates.
Uneven vaccine distribution leads to differing market trends
At the end of 2020, many REALTORS predicted that the vaccine distribution would encourage more sellers to enter the market and, as a result, boost inventory. However, nationally only 22% of agents claim that vaccine distribution has affected their market at all.
However, 33% of REALTORS in the Northeast — the region which boasts the highest percentage of vaccinated residents (over 25%) — noted the vaccine had an impact in their markets. This may indicate that vaccine distribution will have a more drastic impact as distribution rolls out even further.
Sellers are waiting for further vaccine distribution
Within the markets where the vaccine is starting to have an impact, 53% of agents claim that sellers are still hesitant to list their homes. Rather, sellers plan to move later in the year.
Meanwhile, vaccine distribution has only increased buyer demand. This indicates that the vaccine distribution will likely fuel both supply and demand, however the supply has a lot of catching up to do, so this likely won’t change overnight.
The end of the school year may lead to another buyer frenzy
Once the school year ends, expect a surge in parents taking the opportunity with their kids out of school to relocate. Summer is always a popular time for parents to move, but this will be especially prevalent this year, as many parents opted to wait until summer break to take advantage of the low mortgage rates.
This means parents will be selling and buying at the same time. While this will increase inventory, it will also drive more buyers to the market.
The end to remote schooling will have an affect on the market
While parents may continue to work remotely, most kids will eventually be back to in-person schooling soon. Since many homeowners bought second homes during the COVID-19 pandemic, many of those homeowners will likely return to the main home for the school year and rent out their second residence for the majority of the year.
Alternatively, some parents are ready to make that second home their primary home. Some of these parents will likely take the opportunity to sell their main residence, which may help boost inventory.
The economy remains weak and homeowners will need mortgage help
While a surge of hiring helped the unemployment rate and the jobs market is heading in the right direction, many Americans still remain financially vulnerable as we embark on year two of COVID-19.