The past year – thanks to a deadly pandemic, stay-at-home orders, job losses, and financial hardships – left many reeling. The housing market also took a turn, which resulted in positives and negatives alike for home buyers and sellers.
With the new year, comes new incentives for both buyers and sellers. One of the biggest factors currently shaping the housing market? Vaccine distribution.
While real estate agents projected last year that the vaccine would be a top factor shaping the housing market in 2021, early reports suggest the impact hasn’t been as influential as expected. However, ongoing vaccine distribution is slowly but surely starting to affect local markets – especially in areas with a high vaccination rate.
Current market conditions: seller’s market remains prevalent
Approximately 97% of realtors – polled in HomeLight’s 2021 survey – dubbed current market conditions in their respective markets as a seller’s market. This is up from 77% when asked the same question in early 2020.
Buyer demand remains aggressive within the market, while sellers remain hesitant to enter the market during a global pandemic. This has caused home prices to soar. In fact, 93% of top real estate agents claim home prices are rising in their market.
So why are buyers surging to the market? Simply put, just as it’s a favorable time to sell, it’s also a favorable time to buy – so long as you’re willing to navigate an uber competitive market.
Mortgage rates reached a record low back in December. While these rates are rising, they’re still significantly low in comparison to normal market conditions. Low mortgage rates have made the home-buying process much more affordable for those that wouldn’t normally want to enter the real estate market in the midst of a pandemic.
In addition, the shift to remote work has sparked a wave of relocations across the country. Many – who were previously tied to a specific location – were able to seek cheaper accommodation away from major cities. At the same time, families were desperate for more space to accommodate this new lifestyle.
Vaccine distribution will slowly increase buyer demand
While 50% of real estate agents predicted the vaccine distribution would close the gap between supply and demand, only 22% of agents claimed vaccine distribution affected their market when asked in Spring 2021.
However, this percentage differentiates based on region. In the Northeast – a region with one of the highest vaccination rates – 31% of real estate agents claim the vaccine distribution has had an impact on their market.
This indicates that the higher the vaccination rate, the more impressive the impact on the market. Theoretically, as vaccine distribution ramps up across the country, we’ll see sellers return to the market.
If you’re thinking of selling your home, you’ll want to get started quickly in order to take advantage of the rising house prices before other sellers return back to the market. Contact an experienced real estate agent today to get started!