Housing Bubble Uncertainties
This year has been full of unexpected changes and events. The United States suffered a global pandemic that devastated the economy at a rate not seen since the Great Depression. Looking back at March, the housing and real estate market looked as though it was heading into a more considerable decline due to the quarantine mandates. Towards the middle of the pandemic; however, we started to see a slight boom start to occur. So what does that mean for the housing bubble in March 2021?
As of today, there is a very slim selection of houses on the market and yet a great demand for them. This is the tightest supply of homes we have seen turn inhe 20th century.
There are quite a few reasons realtors believe the housing market will continue to become more competitive in the coming months. One of the most prominent reasons has to do with the newly released COVID-19 vaccine (Santarelli). With Covid immunization becoming more accessible to people, it is subduing uneasiness felt the past year. For this reason, the market is predicted to become even more competitive with the months that proceed after more doses are distributed.
As demand escalates, buyers have been forced to bid higher prices for available homes, sending the prices for home to skyrocket. Simply put, the number of homes for sale has decreased and remained down about thirty percent, which leaves the market with close to twice the demand and only two-thirds of the actual supply. Another crucial factor playing into the sudden scramble for real estate is the record low mortgages. These low mortgage rates make the cost of buying a property much cheaper (Santarelli). This is adding to the constant vying over a limited selection of homes. According to Marco Santarelli and Jules Rollheiser, "With inventories this tight, it is unlikely that existing home sales can continue to rise at last year's pace, which means there could be a little slowdown in existing sales throughout 2021." To elaborate, the ESR Group has predicted that home value and sales will rise to a more normal level of 3.8 percent as we move further into 2021(Santarelli).
People everywhere have the hopes of normality returning not only to daily life but also the highly-priced housing bubble. The lofty price increase and record-high demand for homes have made this market ever so more competitive. If looking to buy properties in the coming months, it is crucial that people know areas that might have relatively higher inventory compared to lower. Locations in states like Washington and Nebraska have surpassed the national average by close to forty percent (Insights). It is vital, especially today, that future home buyers are aware of the current housing market conditions and how it could affect their buying decisions.
Insights, Insurify. “Homes in These States Are Flying Off the Market.” Insurify, Insurify, 8 Feb.
Santarelli, Marco, and Jules Rollheiser. “Housing Market Predictions 2021: Is It Going To Crash
or Boom?” Norada Real Estate Investments, 6 Mar. 2021 ,www.noradarealestate.com