Here are a few reasons why our market may be preparing to flatten out.
If you’ve been keeping up with real estate lately, you already know that things have been crazy in our market. Demand is at an all-time high, while inventory levels are the lowest we’ve ever seen. However, I believe that things will begin to shift slightly over the next few months, and there are a few reasons why.
For one, there are groups that decided to hold off on selling until the pandemic subsided somewhat. Now that things are opening up, we’ll likely see more homes on the market because these groups will be more confident about their health and safety. The groups include:
1. Seniors: A lot of older folks had been planning to sell last year, but when the pandemic struck, many thought it’d be a good idea to wait. As the vaccines continue to roll out, we’re going to see more and more seniors trickling back into the market this spring.
2. Insular groups: Similarly to seniors, people with high-risk conditions didn’t want to open up their homes when COVID-19 was spreading. These may be people who are immunocompromised or have family members with health conditions, but now that vaccinations are becoming common, these people will also begin to jump into the market.
3. People afraid to leave the house: The pandemic is obviously a very serious situation, and many people decided they would stay at home. Again, vaccinations are making people feel safer, so we’ll begin to see these individuals enter the market.
With all these people feeling more comfortable about listing, we’re going to see an influx of inventory in our spring market. Things will begin to flatten out and prices won’t be as crazy—in fact, we might see a slight correction in prices.
Demand will go down slightly as well. Many people have struggled to find and purchase homes, and it’s led to a lot of buyer fatigue. After submitting offers and losing homes so many times, your average buyer is going to take a break from the market. So, we’ll see some people leave the market until more inventory comes in. Additionally, cost of living inflation and rising interest rates will also play roles. These will decrease buying power, pushing some buyers out of the market entirely.
The cost of new home construction has also risen because the prices of building materials have skyrocketed. Buyers who want a brand-new home simply can’t get one right now, so they’re sitting out until things change. This means the demand for new homes will likely decrease.
As you can see, there are many different factors coming together that will likely flatten out our market somewhat. I see it beginning to happen over the next three to six months, and I don’t believe it’ll swing us out of the inventory issue entirely. Still, the chaos is likely going to calm down.
If you have any questions or would like more information about our market, feel free to reach out to me. I look forward to hearing from you soon.