An Overview of 2021's Insane Market
Let’s take a look at what factors are causing our market to be so red-hot.
The neighborhood where Nick lives shares a street with an older neighborhood. Back in 2018, a house in that old neighborhood was listed for $495,000. The house didn’t sell for three months, causing the owner to reduce the price, and ultimately, the home was pulled from the market. Recently, at the end of 2020, they went back on the market, this time for $515,000. Four days later, the owners sold the house for $537,000.
So why did the home manage to sell so well and so quickly just two years after the initial attempt? There are a lot of factors at play:
1. Interest rates. Rates are historically low—close to 2.5%. Projections suggest that rates may even dip into the 1s! These rates are driving buyer demand.
2. Prices. Prices are higher than ever, but interest rates are so low that homes are more affordable now than they have been for 30 years.
3. Inventory. Prices are so high because inventory is extremely low. In our area, inventory is measured by the months of supply. In a typical healthy market, there’s usually around three or four months’ supply of homes. Last year, inventory was around 1.2 months of supply. Recently, we saw that there were fewer than 100 homes on the market in all of Carroll County.
"Whether you’re looking to buy or sell, we recommend
that you start the process sooner than later."
These factors are why we’re seeing such a crazy market. People are buying homes sight unseen; multiple offers on homes are causing them to sell for tens of thousands over list price; people are waiving appraisal contingencies or paying thousands more in cash over the appraised value, and so many more atypical things are cropping up due to our wild market conditions.
Whether you’re looking to buy or sell, we recommend that you start the process sooner than later. In our next post, we’ll share some strategies with you to help you sell your home and buy a new one.
If you have any questions about our market or are looking to buy or sell a home, don’t hesitate to reach out to us.