The COVID-19 pandemic has disrupted many industries. To ensure business continuity, almost all industries have quickly come up with backup plans by enabling work from home or remote. With most employees working from home and understanding the significance of a home for themselves, there is a massive increase in purchases of the housing market in 2020. To everyone’s surprise, the real estate market has evidenced a drastic rise, and a more significant number of houses have been sold.
It is reported that the housing sales nationally have evidenced a significant rise that isn’t evidenced in the past 15 years. As per the National Association of REALTORS Report (NAR), the annual growth rate was 5.6 percent in 2020. The first-time buyers accounted to 33 percent, where 52%of buyers are in the age group of 30- 39 years, 88% percent of buyers millennials, 23% of buyers are in the age group of 40-54 years”. The same demand is reflecting in 2021 too.
Because of this immense demand, the house sellers are trying to decode prospects to handle low inventory levels with multiple offers. The disparity between supply and demand has provoked a surge in new house construction. The price rise is due to drained inventory at the lesser point of the price scale, urging buyers in the direction of higher-priced homes. At Present, the housing market is aggressive, and house sales are happening at a quicker scale. When collectively analyze these aspects, you’re more likely going to evidence numerous offers on listed homes.
As per the realtor.com research, in March, housing prices grew 15.6 percent higher than last year and pricing escalated by larger metropolitan areas by an average of 12.1 percent compared to the most significant year. Some markets even evidenced price increase by triple times. Austin had evidenced a price rise by 39.8 percent, New York by 28.3 percent, and Los Angeles by more than 24.8 percent. This sudden price rise during low inventory levels and high demand resulted in a price escalation by fifty-two percent in March 2021 compared to March 2020.
Building homes in the city outskirts where property prices are at a low level, the builders are working hard to comply with the demand in a low price range to meet the buyer’s expectations. This craze was prevalent before the pandemic, but this trend became widespread and even more extensively implemented from the past year.
The COVID-19 crisis has affected the raw material flow, which increased raw material costs and overall construction costs. So, housing builders find it hard to construct adequate residences rapidly to comply with massive needs. For this reason, builders find it hard to offer a special price to buyers. Apart from building new houses, some real estate experts expect individual sellers to suffice the upsurged demand.
Last year had a record number of sales, this year is evidencing low inventory, but the only constant here is the demand hasn’t come down. The low inventory and high demand situation resulted in an excellent opportunity for the house owners who are planning to sell their property, as they are inundated with loads of offers. The purchasers have to pay more money to compete with heavy competition to get their desired house. Sadly, the pattern of high demand and low inventory is obliging potential purchasers to get ready to pay additional costs compared to last year. To act smart in choosing the desired house, buyers need to be patient and analyze various luring offers proposed by the realtors, then decide on what suits them best.