The impact of disruptions from 2020 are far-reaching, and the housing market is no exception. This leaves many people wondering if 2021 and beyond will be enough time to stabilize the economy and real estate investing. Here are four trends that are emerging in the housing market so far this year.
Housing Prices in Metro Regions
The median price of residential homes in metro areas saw a decline in the first part of 2021, making this a great time for those who are looking to buy. The trend is especially noticeable in metro areas of the country. There in also an increase in the numbers for people who are selling homes for the first time, so inventory may increase, which will also decrease median prices as sellers need to remain competitive. Although median housing prices are higher than the same time last year, the increase is much slower. Overall, housing prices have increased by nearly 13%, but less than 4% in metropolitan areas.
Housing Sales Compared to 2020
Even with the economic challenges of 2020, more people are buying homes in 2021. Sales for existing homes increased by just over 1%, most likely due to the higher levels of inventory and competitive median housing prices. Homes that are on the market are also within an affordable price range for most buyers this year. First-time buyers only represent about 30% of home buyers, and this may be an indication of people downsizing or relocating. The southern part of the country is seeing the highest percent of home sales, followed by the Midwest, west, and northeast.
As of June 2021, new home construction continues to decline, and it is at an all-time low as of June 2021. Many predictions indicated that new construction would increase around the middle of 2021, but those predictions have not materialized. Instead, pricing for new homes have made them unrealistic for many buyers. When combined with the inventory and competitive pricing of existing homes, buyers are choosing to get the most house they can for their budgets.
Homebuyers are making purchases much quicker compared to last year. The increase in people looking to buy may influence the decision to jump on a good deal rather than wait. On average, listings are for sale just over one month before they are under contract and off the market. Analysis of buyer behavior and the real estate market indicate that the time on market will continue to decrease.