TODAY’S REAL ESTATE MARKET EXPLAINED THROUGH FOUR KEY TRENDS
As we move into the second half of the year, one thing is
on what terms are best for you and what’s most appealing to
clear: the current real estate market is one for the record
the seller.
books. The exact mix of conditions we have today creates opportunities for both buyers and sellers. Here’s a look at four
Home Price Appreciation
key components that are shaping this unprecedented market.
The competition among buyers is driving prices up. Over the past year, we’ve seen home price appreciation rise across the
A Shortage of Homes for Sale
country. According to the most recent Home Price Index
Earlier this year, the number of homes available for sale fell to
(HPI) from CoreLogic, national home prices increased 15.4%
an all-time low. In recent months, however, inventory levels
year-over-year in May: “The May 2021 HPI gain was up from
are starting to trend up. The latest Monthly Housing Market
the May 2020 gain of 4.2% and was the highest year-over-year
Trends Report from realtor.com says: “In June, newly listed
gain since November 2005. Low mortgage rates and low for-
homes grew by 5.5% on a year-over-year basis, and by 10.9%
sale inventory drove the increase in home prices.”
on a month-over-month basis. Typically, fewer newly listed homes appear on the market in the month of June compared
Rising home values are a big part of why real estate remains
to May. This year, growth in new listings is continuing later
one of the top sought-after investments for Americans. For
into the summer season, a welcome sign for a tight housing
potential sellers, it also means it’s a great time to list your
market.”
house to maximize the return on your investment.
This is good news for buyers who crave more options. But
A Rise in Home Values and Equity
even though we’re experiencing small gains in the number
The equity in a home doesn’t just grow when a homeowner
of available homes for sale, inventory remains a challenge
pays their mortgage – it also grows as the home’s value
in most states. That’s why it’s still a sellers’ market, giving
appreciates. Thanks to the jump in price appreciation,
homeowners immense leverage when they decide to make a
homeowners across the country are seeing record-breaking
move.
gains in home equity. CoreLogic recently reported: “… homeowners with mortgages (which account for roughly 62%
Buyer Competition and Bidding Wars
of all properties) have seen their equity increase by 19.6% year
Today’s ongoing low supply, coupled with high demand,
over year, representing a collective equity gain of over $1.9
creates a market characterized by high buyer competition and
trillion, and an average gain of $33,400 per borrower, since
bidding wars. Buyers are going above and beyond to make
the first quarter of 2020.”
sure their offer stands out from the crowd by offering over the asking price, all cash, or waiving some contingencies. The
That’s a major perk for households to leverage. Homeowners
number of offers on the average house for sale broke records
can use that equity to accomplish major life goals or move
this year – and that’s great news for sellers.
into their dream homes.
The latest Confidence Index from the National Association
If you’re thinking about buying or selling, there’s no time like
of Realtors (NAR) says the average home for sale receives
the present. Call Gambino Realtors at 815.282.222 to discuss
five offers (see graph below):For buyers, the best way to put
how you can take advantage of the conditions we’re seeing
a compelling offer together is by working with a local real
today to meet your homeownership goals.
estate professional. That agent can act as your trusted advisor
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