The housing market is struggling to keep up with demand, as the scarcity of houses for sale has created a buyer backlog. With so many motivated buyers house hunting, you often end up with multiple bids on the same property, which triggers a price increase. Combined with other factors, this backlog has created a “seller’s market.”
WHO ARE THE HOMEBUYERS?
Millennials constitute more than one-third of today’s homebuyers. Many are getting married and having children, making their first home purchase appealing. Others have growing families and seek a larger home to meet their needs. Interest rates are still at all-time lows, giving renters the incentive to buy as well.
After sheltering in place, many owners have re-evaluated their must-haves in a home, including size, amenities and location. Another type of motivated buyer has decided to move away from city life, making coastal Mississippi, the Secret Coast, an ideal place to settle.
WHAT DOES IT MEAN FOR HOMEOWNERS?
If you have lived in your residence for five years or more, this may be a terrific time to sell and invest in your dream home. There is a shortage of houses available for first-time homebuyers. If you are looking to upsize, your house may be the perfect fit for those just getting into the real estate market.
Were you considering downsizing? Families looking for more space after being cooped up during lockdown may find your house the perfect fit.
According to CoreLogic, homeowners gained more than $1.5 trillion in equity in 2020. The number of mortgages in negative equity fell by 21 percent in the fourth quarter of 2020, and the average annual equity gain of $26,300 per homeowner was the highest since 2013. People who owned their homes for five to 14 years sold them last year for approximately $50,000-$80,000 more than their original purchase price.
Those who lived in their homes for 16 to 20 years before selling earned an average profit of $85,000.
Homebuilders are trying to keep up with demand despite obstacles, including higher lumber prices, limited lots, supply shortages and a lack of skilled labor.
“These challenges make it almost impossible for a custom home builder to construct entry-level homes,” says Michael Baudry, builder for Acadian Homes. “However, it creates the perfect opportunity for those with a pre-existing home with equity to build their dream home.”
If you’ve dreamed of building a new home that suits your family’s needs, now may be a perfect time. Apply the equity gained in your existing residence toward a new home. Myriad buyers are seeking a home today. Your first step is to contact a Realtor to determine what your home is worth in today’s hot market. Next, make a list of your favorite things about your current home and those you would like to change. This exercise will help you when searching for your dream home in a market rife with opportunity.
Susan Siemiontkowski is a Realtor with Coldwell Banker Alfonso Realty. Reach her at (228) 239-2621.