If you’ve tried to buy or sell a house this year, then you know that this is no ordinary housing market. Houses are selling almost as soon as they’re listed, and for much higher than asking. Competition is fierce for properties that are available. And inventory is down significantly.
So, what’s contributing to this trend, and what will happen in the coming months?
Inventory shortage and sky-high prices
There is a supply and demand tug-of-war happening in the national housing market right now.
The work-from-home migration of 2020 increased demand for homes, especially in the suburbs. Houses became more than just a place to live; they also served as home offices and classrooms. For many people, they felt their houses couldn’t accommodate these new demands.
As of the end of 2020, there were 23% less homes on the market than one year prior. In addition to that, the pandemic caused a backlog of new homes not being built. Now that building is on again, the prices of lumber and other materials have skyrocketed.
Additionally, prices are still on the rise. The S&P CoreLogic Case-Shiller reported a 13.3% price increase for the year-over-year gain throughout the country.
All of those factors combined, plus continued low mortgage rates, have created the perfect storm of a high-priced, competitive housing market.
Who should buy or sell?
With such steep competition, should anyone be looking to buy a new house right now?
There is one group of buyers in particular who could use this market to their advantage: Downsizers. If you are looking to sell your home in exchange for a smaller place or a rental, you could gain a lot from the current climate. You might pay more for a smaller home than you usually would, but you could also net a much higher profit for your current place. It’s important to run the numbers first and see if it would be a smart move.
But if you’re just looking to upgrade or gain more space for your family, you would probably benefit from waiting this one out until the market stabilizes. Inventory will probably be tight for the next few years, but even if you can wait one more year, you’ll probably have more options and fewer offers to compete with.
New Hampshire Housing Market: Still going strong
In New Hampshire, house sales have been up since March 2020. Demand has gone up, but supply has hit a steep drop-off: 66% fewer houses are available than there were last year.
It’s clear that the pressure is on for New Hampshire buyers. According to Realtor.com, the Manchester-Nashua and Concord metro areas are currently the first and second hottest markets in the country. Buyers aren’t just coming from within the state; there are people throughout New England, and across the country, looking to buy in New Hampshire.
The foreclosure moratorium for the state will lift on June 30, and that will add some properties back into the inventory. But it’s still likely to be slim pickings and tough competition for buyers. If you do need to buy now, get pre-approved, have your down payment ready to go, and know exactly what you want in a home so you can put an offer in on the right property quickly.
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