Are we going to see inventory levels go up in 2021? How will this affect the market?
Hi, I’m Sherri Echols, Broker Associate with RE/MAX Bryan – College Station. In my 11 years in the industry, I have never seen inventory levels this low. Ever!! What does that mean for a seller and a buyer? Lower inventory levels cause home prices to go up because there are more buyers than there are houses to buy in any particular price range. Just like when we had the toilet paper shortage. There were more people needing toilet paper than the stores could keep on the shelves. So this causes home prices to rise. Buyers pay over the listing price and as these transactions close the comp prices go up which supports higher appraisals. It’s great for sellers but much more difficult and competitive for buyers. Lately, we’ve had as many as 10 offers or more on properties that we are listing. Which makes it hard for buyers to have their offer accepted, and allows sellers to choose the terms of the contract that are most favorable to them.
They are taking factors such as down payment, type of loan, contingencies, buyer strength, and less cost to themselves for repairs or other items when they choose the offer they want to accept. Buyers are having to come in as strong as possible with their offers meaning they take the house more As-Is, ask the seller for very little, and try to close in the time period favorable to the seller. The median age of an owner occupant is about 57. We’ve been told by health professionals that the older you are the more at risk you are with the virus or having very serious complications. So many older Americans have waited to list their homes, this is another of the factors that have led to the lack of inventory. I anticipate that inventory levels are going to go up once people feel more comfortable listing their homes post-vaccination. Corelogic predicts the turnover rate, the percent of houses that sell in 2021 to be higher than the 20-year average turnover rate.
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