Patience is key to buying a home this year
May 4, 2021 | Dwell JC
Our real estate market is really heating up as we enter the Spring season. We’ve been seeing multiple offers on listings, and in one case, a single-family home I listed, received 9 offers in the first week. Buyers need to be ready to compete. This is especially true for anyone looking for a single-family home anywhere in our area. Inventory is low and competition is high.
According to the National Association of Realtors, homes are getting an average of 4.8 offers per sale, and those numbers are rising. This makes sense because there just aren’t enough homes on the market to keep up with demand. As a result, we’re in a sellers’ market, which means lots of competition if you’re a buyer and lots of offers if you’re a seller.
According to Sam Khater, Vice President and Chief Economist at Freddie Mac:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes . . . That decline has resulted in a decrease in supply of entry-level homes…’”
When you consider the number of homes built in the U.S. by decade, the serious lack of new construction is clear.
The number of newly built homes is disproportionately lower than the rate of household formation, which, according to the U.S. Census Bureau, has continued to increase.
“We estimate that the housing shortage increased to 3.8 million units by the end of 2020.
In the first quarter of this year, home sales in New Jersey were up 17.7%, but inventory remained low, with a 17.6% decline in new listings. As a result, the median sale price continued to climb, and is now up, 21.6% year-to-date.
The good news is, we are seeing lots of building here in Jersey City with 37,000 additional units planned or under construction.
According to Lawrence Yun, Chief Economist at the National Association of Realtors:
“The March figure of 1.74 million housing starts is the highest in 14 years. However, this construction boom needs to last for at least three years to make up for the shortfall.“
So, the bottom line is this, if you’re planning to buy this year, the key to success will be patience and persistence. You can expect competition, for well-priced homes in high-demand markets, but remember there has never been a better time to buy or sell a home, with interest at record lows, and the stock market at record highs.
Please feel free to reach out to me, if you’d like to learn more about what’s going on in your market. AND if you enjoyed this article, please like, follow, or subscribe to my mailing list.
Until next time!