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Home Prices are Soaring, but Will it Last?

By: Aahoo Pourang

The coronavirus pandemic caused a massive halt in the economy and real estate. Because of all the uncertainties of COVID-19, homeowners spent their time at home, causing a massive itinerary for home sellers. According to a survey by Redfin from August 2020, “of 1,000 people who were planning to buy a home within the next 12 months, 25% of respondents stated the pandemic caused them to want to move or speed up their moving timeline, and 17% indicated they were interested in looking for a less expensive home.”

Because there was an increase in demand for homes, listing prices naturally began to climb. This has been a trend that continued throughout 2021, since historically low interest rates were also added to the mix. The average rate is currently 3% on a 30-year fixed mortgage where a year ago, the average rate was almost 3.25%.

But for the second half of the year, it’s been predicted that while low-interest rates continue, there will also be a lower inventory which will cause prices to go higher, and multiple competing offers on one home. Not only are there less houses on the market, but there are more real estate agents than ever, eager to sell them as quick as possible.

Compared to two years ago, only a quarter of homes were sold above sellers’ asking price, compared to this past March, when prices rose at the fastest pace in seven years. According to the LA Times, the median home price in L.A. county in April was $750,000.

What all this means is that for the rest of 2021, it will definitely remain a seller’s market, and home prices will continue to climb while inventory continues to sink.

For more market updates call Mina Pourang, “Better Loans Corporation’s” in-house loans and real estate expert at (949)202-7484. When you need the best, Call Mina Pourang!

Sources: ABCNews website