Although the housing market is expected to remain strong in 2021, there is still a challenge the market faces, the lack of inventory. The National Association of Realtors (NAR) reported that “unsold inventory sits at an all-time low 1.9-month supply at the current sales pace, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019.” In more simple terms, if there were no new homes listed, it would take less than two months for all of the homes on the market to be sold.
So, what is this doing to the market?
The high demand and lack of inventory have median home prices on the rise, up 12.9% from December 2019. They also spent on average 20 fewer days on the market as compared to last year in December. The NAR Existing Homes Sales Report stated, “seventy percent of the homes sold in December 2020 were on the market for less than a month.”
So, what does that mean if you are a buyer?
As a buyer in today’s market, it will benefit you to prepare yourself and practice patience. Prepare yourself financially first, make sure you have obtained preapproval, have money saved for a down payment and closing costs, and be ready to act fast! The home that you have your eye on today might be under contract tomorrow. Or you might find yourself in a multiple offer situation where you need to have the most creative offer to win the bid. Whatever it might be, today’s market is competitive!
So, what does that mean if you are a seller?
Good news for you, you are in a great position to negotiate the terms you like best, obtain a higher price, and get a greater return on your investment. With inventory being low, being a seller in today’s market is a huge benefit. Buyers are coming motivated and with creative offers, further driving multiple offer situations, giving you plenty of control.
References:
Crew, K. (2021, January 27). What record-low housing inventory means for you. Retrieved February 12, 2021, from https://www.keepingcurrentmatters.com/2021/01/28/what-record-low-housing-inventory-means-for-you/
Existing-Home Sales Rise 0.7% in December, Annual Sales See Highest Level Since 2006. (2021, January 22). Retrieved January 28, 2021, from https://www.nar.realtor/newsroom/existing-home-sales-rise-0-7-in-december-annual-sales-see-highest-level-since-2006
Written By: Haley McCarty
