The real estate market has shifted dramatically in recent years, with a variety of trends impacting buyers and sellers. Today’s market is a highly competitive environment, making it more important than ever for buyers to understand the current state of the market before investing in their next home.
In the immediate aftermath of the COVID-19 pandemic, a newfound wave of buyers flooded the market. The rise in demand, combined with job security, low interest rates, helplines to support struggling homeowners, and a variety of other pandemic initiatives, meant that the real estate market was finally primed for growth.
That said, there are still a few notable trends that buyers should be aware of before diving in. For starters, home prices have seen a steep increase in the last year, with the median home price nationwide now surpassing the pre-pandemic levels of 2019. This sharp increase is largely driven by the time-sensitive nature of the current market, as buyers typically have just a few weeks to act on a given home before it is snatched up.
The competition is especially intense in desirable metropolitan areas, as the cities become a source of refuge for those looking to avoid the pandemic internally. This includes lower-priced suburbs and some rural locations as well, though these tend to be overshadowed by the urban areas that still retain their high-level of value.
As the market continues to heat up, buyers should anticipate a more difficult time securing a mortgage. Tougher underwriting standards, particularly among government-backed loans, coupled with continued job instability, have made it more difficult for the average buyer to secure the financing they need.
Limited Availability
In addition, buyers should be aware of some limited availability in certain areas, as the lack of inventory in some locations can impede the ability to quickly shop around. Buyers should note that the majority of housing demand has shifted to single-family homes, shifting away from the previously popular condo units. This has had a direct impact on the inventory numbers nationwide, creating a greater competition for the limited stock available.
Added Costs
In the current market, buyers must also be mindful of the added costs associated with purchasing a home. For starters, taxes and fees are often much more expensive than most buyers realize, and a thorough understanding of these associated costs can help them ensure they are getting the most value for their money. Lastly, buyers should be aware of the possibility of buying into an area with deed restrictions, for which they may have to pay a premium.
In summary, the state of the current real estate market is a highly competitive environment for buyers, particularly in major metropolitan areas. To thrive in today’s market, buyers must be aware of the unique factors that affect their ability to buy and have an understanding of the associated costs. Doing so can help them navigate the market successfully and make an educated decision based on their own financial situation.
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