While you might have put the decision to try and sell your home on hold during the continuing Coronavirus pandemic, many real estate experts say that this summer could be one of the best times to market a house in years.
According to realtor.com, data suggests that buyers are outnumbering sellers in the housing market, which means it’s better to be a seller than a buyer. So, rather than writing off this summer’s home-selling season as a lost cause, instead, check out these six reasons why the market could actually be moving strongly in your favor.
1. Homebuyer demand has bounced back
This past spring, home selling naturally went dormant for a while when COVID-19 was spurring many states to enforce quarantine and ban open houses. Now that lockdown restrictions are beginning to loosen, however, homebuyers are out in force and eager to make up for the lost time. The real estate market already has experienced strong signs of a rebound, according to the National Association of Realtors®’ (NAR) Pending Home Sales Index (a forward-looking indicator of home sales based on contract signings).
In May, after two months of decline, pending home sales increased by 44.3 percent—the highest month-over-month jump since 2001, when the index began. There’s significant demand right now, especially in the suburbs and in smaller, less expensive cities, as buyers seek to escape the metro areas and more companies allow employees to continue working remotely.
2. Home inventory is still low
While there’s been an influx of homebuyers, meanwhile, the number of homes for sale to actually meet this pent-up demand is at an all-time low. Lawrence Yun, NAR’s chief economist, reported that there was insufficient supply this past year and the shortage has intensified during the pandemic. According to realtor.com’s market outlook, the housing inventory in June was 27 percent lower than a year earlier. Among the reasons for the shortage of available homes: Many people are living in their houses longer than they used to, and they’re also are fewer distressed properties on the market due to government stimulus support, including mortgage forbearance and unemployment benefits.
3. Home prices are rising
With demand for homes up and inventory down, the market conditions are ideal for sellers to get top dollar for their houses. According to NAR, single-family home prices increased in most markets during the first quarter of 2020, with the national median single-family home price increasing 7.7 percent, to $274,600. This good news may surprise sellers since the housing market was expected to take a hit and home prices were likewise expected to drop because of the pandemic. That’s quite the contrary. Home asking price growth is actually higher now than it was before the pandemic.
4. Mortgage interest rates are low
Another factor pushing home buyers to shop is the historically low mortgage interest rates. According to Freddie Mac’s July 2 report, average interest rates recently reached a new record low of 3.07 percent for a 30-year fixed-rate mortgage. This means homes could cost potentially tens of thousands less during the lifetime of the loan, so it’s understandable that mortgage purchase applications have jumped since this past year.
5. The economy is showing slow signs of recovery
While the pandemic led to record-high unemployment rates in March, these levels have recently fallen slightly, which could be a good sign that people are still eager and able to buy a home. Continuing spikes in COVID-19 infection rates may have a negative impact on employment numbers in some areas going forward, but for now, the national trends are heading in the right direction. Joblessness data from May and June suggest that businesses are adding back jobs as consumers get back to spending, and some companies are now scrambling to keep up with demand.
6. Homebuyers’ needs have changed
Along with working remotely, people have been spending more time at home in general. This has sparked a fresh deluge of home buyers whose current homes no longer seem as comfortable or roomy as they were pre-COVID-19. Home offices, additional privacy, outdoor spaces, and just more room are becoming more important to homeowners. So, keep in mind that playing up these features and amenities when you sell your home can attract buyers. Home staging and visually appealing listing photos, though always important, are especially crucial in today’s market.