Last March, the future was uncertain. We stayed at home, businesses closed, and toilet paper became a commodity. We wondered if the real estate market would grind to a halt. Thankfully, that didn’t happen. Demand for homes increased along with home values. In fact, according to a recent article from Inman News, home prices increased 10 percent year over year. Meanwhile, inventory decreased.
This year, we’re down to just one-third of the normal level [of homes for sale].
The inventory statistic actually understates the crisis because properties in many areas are in such demand that they go immediately into contract…Only the most diligent homebuyer, well-financed and armed with an aggressive buyer’s agent (and real-time market data), even has a shot at these homes. – Michael Simonsen
WHAT’S CAUSING THE INVENTORY SHORTAGE?
- Low interest rates
- Investment properties and the “buy low, sell never” philosophy
- Less new home construction
- Millennial buyers – Our largest generation will drive housing demand for the next 5-10 years.
- Housing policies – Current policies are homeowner-centric, meaning that they focus on keeping homeowners in their homes rather than foreclosing.
The good news is that in this crisis, Americans have gained trillions in wealth. Even those most tragically affected have been able to stay in their homes and benefit from large increases in equity. And there’s still tremendous demand waiting to be unlocked — if we can create the conditions to do so. – Michael Simonsen
A LOOK AT THE LOCAL MARKETS
THE TAKEAWAY
Buyers are looking for homes, which makes now a favorable time to sell. We’re here to help you successfully navigate the seller’s market – in Richmond, the Northern Neck, Williamsburg and Wintergreen. Call us to learn how much your home value has grown. 804.288.2100
Sources: Simonsen, Michael. “What’s driving the real estate inventory crisis? These 5 trends.” Inman News, February 27, 2021, https://www.inman.com/2021/02/27/whats-driving-the-real-estate-inventory-crisis-these-5-trends/. Accessed March 1, 2021.
CVRMLS Data Accessed 3/12/2021 for February 2020-February 2021
