It is an understatement to call the last year a time of challenge and change. When the pandemic began, immense fears of a historic real estate crash were followed by the surprise of what Forbes has called ‘an incredible boost in the industry.’ As work-from-home plans solidified for many people indefinitely, so did lifestyle choices. Individuals and families finally got to prioritize where they wanted to be instead of how close they needed to be to work.
The result is soaring property demand that appears to be more than a short-term surge, but the start of a housing shift. Below you will find a list of the moves that are being made and what that means in the short and long-term. We encourage you to read the recent article and resource used this week ‘The Real Estate Inventory Crisis Creates A Historic Opportunity’ from Forbes in full as well.
We all know that we are amidst a strong seller’s market, but Forbes Council Member Marco Del Zotto takes it one step further and calls it a ‘name your price’ market. Here are a few reasons why the demand is so high… and the inventory is so low.
| Purchase demand is soaring post-pandemic as buyers seek more space and enjoy greater 'work from anywhere' freedoms.
| Interest rates are remaining in the historic low range, enabling stronger purchasing power than several years ago.
| The millennial buyer’s market is strong – and expected to stay that way for the next 7-10 years. The Pew Research Center reports that there are now more millennials than members of any other generation.
| The Baby Boomer buyer’s market is strong, with older adults now moving where they want to retire (and many retiring earlier than expected on account of the pandemic).
| The investor purchase demand is high in many areas, with tech products creating online rental platforms that make property management easier. Many existing homeowners are now seeking income generating opportunities as well.
| New housing starts have declined since 2008 and never regained full-speed, leading to an even greater imbalance between supply and demand.
Homeowners know that selling now has the potential for a huge return on investment. But what’s the difference between selling now and selling later?
Demand is likely to outpace supply for several years. However, the unknowns that could impact the current cycle are if and when interest rates rise, and by how much, how fast. The other projections some analysts have made is that inventory could increase to some extent as new construction (primarily targeted at Baby Boomers and millennials) emerges. These new builds have the potential to increase the inventory of older properties in the future.
In reality the future of any market is never known. The last several years have no doubt brought more surprises than certainties. For sellers who have been on the fence about when, but know they DO want to move, there is a historic and possibly unmatched opportunity at your fingertips. A number of factors will impact the desirability of now vs. later, particularly where you are moving to next.
To run through some scenarios of what you could sell your home for, what you could walk away with and what you could do with it – please do not hesitate to reach out. Ask now, ask again later… just always ask.
Knowledge is power, timing is everything and strategy is how we make it all come together for you! ~ Mark