Whether you’ve been looking into buying or selling a home since the pandemic first hit, you’ve undoubtedly noticed that the housing market has been particularly strong this past year.
Inventory is at an all-time low. Multiple offers and bidding wars are the norm. Despite the fact that many figured homeowners would stay put during a pandemic, the opposite has been true.
So what are the factors that are causing the housing inventory shortage? Here’s a closer look.
Early pandemic fears prevented homeowners from listing
Early in the pandemic, many homeowners who’d planned on listing in 2020 decided to stay put, whether because of the sudden nationwide economic uncertainty, discomfort with allowing in-person home showings, or because of a job loss or other loss of income.
As real estate agents and potential buyers quickly adjusted to the pandemic normal, with virtual showings, enhanced cleaning and sanitizing protocols, and an embrace of tools like 3D home tours, the issue of contact became less and less influential. Homeowners did begin listing their homes again—but the supply hasn’t even come close to keeping up with demand.
In fact, according to Business Insider, housing inventory in October of 2020 hit a record low, with just 2.5 months supply.
Renters and city dwellers flooded the market
As the world shifted to a work-from-home lockdown mode, countless renters and those living in high-density, urban areas took a look around and decided they wanted a home of their own—preferably, with a lot more space.
In 2020, these first-time home buyers and people looking to move into the suburbs contributed to massive demand for homes, which has extended into 2021.
This demand shows no sign of slowing, either—according to HomeLight’s recent Top Agent Insights for Spring 2021 report, 93% of agents surveyed say that housing prices are up in their area due to ferocious buyer demand.
This means that those selling a house in 2021 can likely expect to bring in a strong price for their home, potentially even above market value if they’re in a particularly hot market.
Low mortgage rates are also fueling demand
In addition to the desire for more space and suburban living, historically low mortgage rates are also a contributing factor to the housing shortage.
Buyers who may have been on the fence about purchasing a home are deciding to take advantage of the low rates, which are hovering between 2.8% and 3.6%, depending on the type of loan.
These rates are especially attractive to those same first-time home buyers who see themselves working from home for the foreseeable future or even indefinitely. Spending so much more time at home has made homes with additional space for an office, as well as outdoor space, seem much more attractive.
So if you’re considering selling a house in 2021, you may want to make your move and list now! By taking the time to find a great real estate agent, preferably one who’s versed in COVID-19 home selling and showing protocols, and using a tool like a net proceeds calculator, you’ll be well prepared to enter the hottest seller’s housing market in recent history.