The Pandemic Has Changed What Homeowners Want
Bidding Wars May Hit An All Time High In Many Areas
Mortgage rates continue to stay low making the market perfect for sellers with the caveat of a few unique circumstances. Almost no one is selling, prices are rising and many sellers are apprehensive to have potential home buyers trapsing through their open houses while a pandemic still rages through the country. In addition, the banks are reluctant to lend to those really needing the money.
Regardless of such circumstances, transactions are continuing to close with a 13% bump from the beginning of June compared to last year, according to the Mortgage Bankers Association Purchase Index. Home builders are also showing some rebounding numbers this spring in comparison to last years sales. For it is unique to see a high, followed by a dip and then back to a high again with sales numbers in the course of a short few months.
Are Buyers Flocking To the Suburbs?
Economists are predicting prices in suburban neighborhoods will rise faster than those in neighboring cities. A part of the shift is due to the change in work habits as many employees are working out of their homes instead of commuting to their offices and looking to social distance. There is also changes to the demand for the type of house a buyer is looking to purchase. Ones with more space for home offices and technology set up away from other family members. All currently not conducive to apartment living.
As a result, listings for homes in suburban areas and smaller towns is over 150% higher than those in the city over the last few months. This bit of evidence supports the economists theory that buyers could in fact be headed out of the cities in larger numbers in search of suburban living.
In the meantime, the amount of homes listed in April was the lowest on record for that month ever recorded, according to the National Association of Realtors. In addition, banks delaying foreclosures has made the supply even tighter . In a nutshell, this means even in an unstable economy, suburban homeowners may be set up to name the price for their properties because of such demand. There is little to sell and more looking to buy in many of the neighborhoods just beyond the city, making it ripe for a bidding war. Low inventory and reasonable interest rates should continue to be encouraging for home builders as well as long as the economy continues to improve over time. Only time will tell, as the market continues to react to the unprecedented curve balls 2020 has been throwing at it.