Spring is almost here, and many are wondering what it will bring for the housing market. Even though the pandemic continues on, it’s certain to be very different from the spring we experienced at this time last year. Here’s what we, and a few of the other current industry experts, have to say about the housing market and how it will bloom this season.
“The local real estate industry will continue to bloom this spring because of a perfect storm of factors related to historically low inventory, favorable interest rates and a national workforce gone remote. Our area appeals to people who want to enjoy more outdoor space as we navigate the ways Covid has changed the world. A year ago, home construction was put on hold as public health wrapped their arms around a safe way to approach business as usual in a pandemic. We are now seeing a pressure cooker of high demand and low inventory that will result in a competitive market for months to come.”
“Despite early weakness, we expect to see new listings grow in March and April as they traditionally do heading into spring, and last year’s extraordinarily low new listings comparison point will mean year over year gains. One other potential bright spot for would-be homebuyers, new construction, which has risen at a year over year pace of 20% or more for the last few months, will provide additional for-sale inventory relief.”
“A lot of industry experts feared a foreclosure crisis following all the mortgage forbearance of 2020. While there will certainly may be more than the average number of homeowners who will be in financial trouble thanks to COVID-19, the vast majority of these homeowners will be able to sell their home on the open market thanks to the significant uptick in the average homeowner’s equity and avoid foreclosure altogether. When the mortgage forbearance programs come to a close, we’re likely to see an uptick in listings. This is good for everyone; buyers will have more to choose from, and sellers will be able to get out of a home they can no longer afford. But, the ideal conditions won’t last forever.”
“Some people will feel comfortable listing their home during the first half of 2021. Others will want to wait until the vaccines are widely distributed. This suggests more inventory will be for sale in late 2021 and into the spring selling season in 2022.”
“Since reaching a low point in January, mortgage rates have risen by more than 30 basis points… However, the rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.”
“As the housing market heads into the spring home buying season, the ongoing supply and demand imbalance all but assures more house price growth…Many find it hard to believe, but housing is actually undervalued in most markets and the gap between house-buying power and sale prices indicates there’s room for further house price growth in the months to come.”
“Many factors are contributing to the increase in home values in greater Traverse City but none greater than the inventory crunch. There is very limited supply in relation to demand in our area. Cost of lumber, still historically low interest rates, and a migration of ‘can-work-from-anywhere’ employees choosing our region, all put pressure on home values. Even as interest rates continue to increase, our area has been discovered and the supply will take a while to catch up to the new demand.”
The experts are very optimistic about the housing market right now. If you pressed pause on your real estate plans over the winter, let’s chat to determine how you can re-engage in the homebuying process this spring; we’d love to help!