How Long Will The Real Estate Market Stay Hot?
If you’re planning to sell or buy a house, you might be thinking about when’s the right time to do so. However, some real estate experts use numbers
Some people are worried about the possibility of another real estate market crash taking place anytime soon. Real estate has long been regarded as a secure investment, but the ongoing pandemic and other factors will put this hypothesis to the test. This led to some investors and would-be homeowners reconsidering their homebuying decisions.
If you’re planning to sell or buy a house, you might be thinking about when’s the right time to do so. Nobody can accurately predict the real estate market as many factors are to be considered. However, some real estate experts use numbers to predict and map the future of the industry.
Can The Current Market Keep Up Its Steam
Some analysts answer questions like this by studying figures associated with real estate market trends. These include data on the number of newly built homes, homebuyers entering the market, the turnaround time in selling houses, and the possibility of home prices increasing. These aspects shall be discussed in each section below.
Expected Number Of Homebuyers In The Market
It’s said that most millennials will be turning 30 years old this year and the number of people joining the ranks of people in their thirties is expected to grow for the next three years. This number means that more new home buyers might enter the market as this is the usual age for an individual to purchase a home.
This is a trend observers can expect to sweep throughout the whole real estate market in the United States. If you’re in Idaho, Boise house buyers are expected to increase their numbers which is great news for real estate agents in the area.
How Fast Are Houses Being Sold
According to some experts, existing homes were on the market for just three weeks before the start of the year. This means houses were sold two weeks earlier in comparison to how they did the preceding year. That’s a piece of positive news for individuals who want to sell their homes as soon as possible.
Buyers, on the other hand, must remain vigilant and focused. You wouldn’t want to take your time once you’ve found your ideal home. Due to the fast turnaround times, you’re more likely to miss out on your forever home if you choose to not act fast and put an offer on it right away.
Quantity Of Newly Built Homes
Some real estate experts say that the number of newly built homes and those listed for sale is lower than the previous year. So, how will this affect the market?
The limited number of houses available means it’ll be harder for homebuyers to find a good deal on the home they’re eyeing. This implies that, like stocks and shares, home prices are strongly influenced by the law of supply and demand. When there’s more demand, prices tend to rise; when there is more supply, prices tend to fall. The low number of newly built homes is also a good indication for sellers to sell a house for top price.
Current Trends In House Prices
Most real estate experts see an increase in homes’ prices as demand rises with a low supply. The housing market remains attractive for buyers. Since buyers are mainly involved in the housing market, it pushes up home prices by double digits and forcing homes to sell at lightning speeds. Fees are projected to start rising today and beyond, given the ongoing supply-demand gap in the market.
The current number of houses on the market is also at an all-time low, dating back to the turn of the century. More price increases are likely to happen before either supply or demand picks up.
Only if production ramps up rapidly or demand softens will the current rate of price inflation likely slow down. Luckily, there are reasons to assume that the speed of the trend could be changing since more inventory is expected to become available.
Possible Hindrances For Positive Real Estate Market Trends
However, these predictions aren’t 100% accurate. Real estate expert says that some factors might affect these predictions and they are as follows.
First Time Buyers Are Likely To Face Challenges
Though young adults may fuel the increase in home sales for the following years, they might also face some challenges from buying a home.
To purchase a house, buyers need more funds than ever before. According to some reports, affordability deteriorated in most of the nation in the fourth quarter of last year. Median home prices rose by at least 10% in much of the country. The main explanation for a possible housing slowdown is a lack of affordability. As mortgage rates increase, sales are also slowing. Given how much housing demand has been pushed forward, sales may be significantly lower, signaling a market crash.
Increased Number Of Seniors Considering To Live In Assisted Living Centers
The trend toward downsizing or relocating to a senior living facility is likely to continue. As the country’s population ages, real estate professionals will face many obstacles due to these shifts. The elderly would need a senior living alternative that meets their requirements. It might also result in a decrease in the number of old adult home buyers.
Site Visits Remain Risky
Even though virtual tours can give buyers a good idea of a property, it can be difficult for them to commit to a purchase without visiting the property in person. Buyers are avoiding property showings in some cases, despite their curiosity, due to risk factors. Even though it’s already a buyers’ market, buyers can’t behave as they wish because of the current situation brought upon by the pandemic. This difficulty to decide becomes a reason for buyers to delay their home purchase.
Setting Sights On The Future Of The Industry
With the number of new home buyers versus the low number of newly built homes, it can be predicted that the real estate market will maintain its current state. High demand is why houses are being sold fast compared to how it was from the previous year. This is a key factor why real estate experts see a continuous price increase of real estate properties.
Despite these predictions, there are still some factors to consider which might affect real estates’ uptrend. Its affordability for new home buyers, the increasing number of old adults considering living in assisted living centers, and the risk of site visits for homebuyers may affect buying decisions. If these challenging factors can be overcome in the following years, the real estate market will likely stay hot.