Fannie Mae noted that buyers and sellers are at different places when it comes to their perspectives. A large portion of buyers think that it may not be the best time to purchase a home. On the flip side, over 75% of sellers think that it is a fantastic time to sell. But who is right and who is wrong? It will be very important to understand this as it happens in the last quarter of 2021.
The Real Estate Reality Is More Nuanced
Let us first take a look at what this real estate reality is like for buyers. Buyers have quite a bit to be worried about in this present real estate environment. While real estate properties are at a higher price point, rates are quite low. This means that real estate buyers can still take advantage of low rates.
Most economists do not think that housing prices are inflated by over 15%-20%. But it is true that housing inventory is not high. Indeed, it is true that competition is very robust. But these are not significant factors that should hold an individual back. It can still make sense to purchase a home in this current real estate market.
What does it look like for Sellers?
Sellers are awash in real estate opportunities. Thanks to a scarcity in home supply in many parts of the United States, sellers have had opportunity. Remember that while inventory is far from excessive, demand is very strong. Homeowners in various cities have seen their real estate values soar by over 19%.
But What is Driving the Buyers Market?
Many more millennial families are seeking to get out of the cities and get into more spacious homes. These families seek to grow and go to rural and suburban towns. This is not a trend that is new. It is a trend that was taking place before 2020.
The next factor is that of remote work. Why would you want to live in the city if you can live in the suburbs or rural areas? You can have a lower cost of living and have more space. Yet another critical point is that more individuals are purchasing existing homes.
Everything is Not Perfect for Sellers
Remember that sellers do not magically sell a home and then get out of the market. Most sellers are likely to want another home. While sellers are able to realize a profit, they will likely move to areas where prices are higher. They could notice the same pain that buyers face and that could contribute to selling hesitancy.
What are the Final Points?
More sellers may list their homes on the market to see the level of interest. They may want to see how much they can earn in the current real estate environment. If more sellers do list their homes, this increases inventory. Now, you know that more supply with comparable demand can help to decrease prices.
But there could be an even further opportunity here for buyers. If buyers still remain hesitant, one can be sure that housing prices will start to lower. An overcorrection in the real estate market would be welcomed by many buyers.
It looks like the market should remain steady but may become more buyer friendly over the next few months.
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