Low Inventory in the Housing Market: A Seller’s Market
Covid-19 sent shock waves through the American Economy in March. The Wall Street Journal reported that some 30 million people lost their jobs amid the pandemic, and while businesses are slowly beginning to regain strength and momentum, some markets are at a stand-still. The housing market was one that took many economists by surprise, though. New buyers continued to enter the market despite travel bans and restrictions, so much so that now there is a severe shortage of homes for sale.
Even though travel, large gatherings, and open houses have been limited or banned, buyers have continued buying. But with mortgage interest rates at an all-time low and thousands in savings on loans, it’s hard to blame them! This, combined with more companies allowing workers to work remotely from home, has led to more and more young families and individuals moving away from large cities and metropolitan areas, looking to settle into more suburban ones.
The shortages of homes for sale are not all the buyer’s fault. Many would-be-sellers have dropped plans to sell due to safety concerns, while others have lost their income source and cannot afford to move as they had planned. However, this inventory’s scarcity has shot the value of homes still for sale through the roof. Studies have shown that the median listing prices have grown 12.4 percent over the past year, which is the fastest-paced growth the economy has seen, surpassing the previous record held by 2016. As the growth in home value steadily increases, it is a seller’s market, at least for the time being. The senior principal economist at Zillow, Skylar Olsen, has predicted that while home sales will peak this fall, they will gradually decline through 2021. However, throughout the next year, sales volumes overall are expected to stay at higher percentages than the pre-covid markets saw.
It seems like for the time being, the market is favoring the seller, and while 2020 has been no one’s year, it may be the perfect year to sell your home for much more than you’d initially planned!
