Market Madness: The Latest Market Report

As craziness ensued on the basketball court, there was some “madness” going on in the housing market in March as well. Check out our latest summary of the market report from Keeping Current Matters, Inc.

Here’s the skinny

Everyone wants to buy, but not many can right now. Not because of high mortgage rates or a lack of interest, no. It’s because the biggest challenge for potential homeowners or buyers in general is the lack of inventory. 

This past year has been a whirlwind for the real estate market. Although we may have already seen the lowest rates, mortgage rates are expected to remain low and linger around 3% for well-qualified buyers. Statistics show that January was the lowest in recent memory. 

Just for reference, January and February of 2020 were the best months for the housing market in the last ten years, and this January and February surpassed those marks. As the economy continues to uptick, a strong spring sales season is in the cards for realtors— if you can find the property. 

Right now, the greatest asset to home ownership has been the role of equity for families. Whether it’s the hope that the vaccines have brought and a proverbial “light at the end of the tunnel” for the pandemic, more homeowners are realizing the equity value in their homes. 

As prices continue to rise, this translates to more equity for homeowners. The final quarter of 2020 boasted an average of 10% appreciation across the country, with the most home appreciation in the South and the Midwest regions. In 2020, the typical homeowner made $24,000 in home wealth. 

This fact has left many wondering: are homes appreciating too fast or are homes becoming unaffordable? The answer is no. 

Market value and leverage

Housing is not overvalued today. Home affordability is “very good” across the country. Home affordability and affordable housing are two different concepts.

“Housing affordability is this,” said Will Lawrence. “A household is considered ‘low income’ if it makes considerably less than the median income for that area. A dwelling would be considered ‘affordable’ for low income families if it costs less than around 25 percent of the area median income.”

“Affordable housing,” Lawrence continued to explain, “is whether a household can pay for the house, while still having money left for other necessities like food, transportation, and healthcare.” 

Basically, having low income homes can affect the values of the homes around them, but Lawrence said, “It’s great for buyers that have minimum wage jobs and need a place to live.”

Typically, renters want to achieve the goal of homeownership and upgrade from renting to buying. Many homeowners want to upgrade right now as well, but they are staying put due to the lack of inventory. Many people have said, “We want to sell, but we don’t know where to go.” The number one thing sellers have right now is leverage. The listing situation is low, and it is projected that 8 million more homes could be sold in the next quarter if we had the inventory. 

“If you own a home, but you know it’s not your ‘forever home,’ I would sell right now,” said Nicole Canole when asked for her advice. “Sell now while the market is hot, and rent for a year or so.”

“Hot” might be an understatement. January and February of 2020 was a “sweet spot” for the market. This year, it is “even sweeter” as the market is yielding 1.9 months of active inventory across the country right now. It is the “best time to sell a home” in most of our lifetimes. 

If you’re ready to capitalize on this market sweet spot, we know how to sweeten the deals for you and your family. If you’re ready to “take the court”-- or market-- right now in this “madness” we’re ready and willing to coach you through this time. We’ll help you call the plays and execute the game plan, so you aren’t left in the dust or tossing up a prayer before the “buzzer sounds” on this market. 

Our team at East + Ivy is ready and willing to guide you through the process, but we can’t sell what we don’t have. If you think you’re ready to make a change, contact one of our realtors today, and we can guide you through the process of selling this year.