1. People REALLY want to buy your home. Like really, really.
The total housing inventory was down 16.4% from the prior December. As a result, the amount of time a home spent on the market was basically halved while receiving double the number of offers. Along with faster closing times, we saw a 13.5% increase in average home price (www.nar.realtor).
For anyone that has shown a house before, you understand having your home on the market for less than a month is a major win for anyone looking to sell. That’s less time spent yelling at the kids “it has to look like no one lives here” with the added bonus of a 13.5% selling price bump.
2. Most people want extra room to accommodate working from home.
Realtors reported over 60% of potential buyers to be looking for extra space in their next home to use as a workplace (www.nar.realtor). While a bigger home can mean a more expensive home in a competitive market, building from scratch allows you to benefit from your high sales price without paying the premium in the current market. Building a home can even allow you to acquire “instant equity” in some circumstances when comparing the sales price of your finished home to the actual cost of building.
3. There will not be a sharp rise in the amount of first time home buyers.
Mortgages are expected to rise but remain near record lows of about 3% interest (www.nar.realtor). While this is a major incentive for new buyers, higher asking prices have prevented a significant rise in first time home buyers. We expect this trend to continue with large down payments creating a barrier to entry.
4. Housing starts may be recovering to pre-2008 numbers.
More new homes were started in 2020 than any other year since the Great Recession. In fact, December 2020 saw the end of a year with the highest number of new homes started since 2006 (www.census.gov). With a constricted pool of options, more and more homes are being built to help meet the demand. As the nation feels the hope of additional economic stimulus, increased new home projects are expected to continue.