Selling a home right now is like going to a dance and everyone wanting to dance with you. The 2021 high home price surge came from solid unsatisfied housing demand.
Home Price Surge Causes
Wall Street Journal considers that the real factors sustaining the housing demand are:
- Millenials demanding new homes
- Homeowners not moving to small homes, and staying in their properties
- House Construction not meeting the demand
I may consider two additional factors:
- Mortgage rates are historically low allowing more people to buy homes. You might need to remember that mortgages were 18% in the late ’70s and between 6-8% in the mid 2000s. Today rates are unbelievable low.
- Staying at home caused a great demand for new just-built homes and single homes in suburban areas. The Covid makes realized to several renters and homeowners that their current home does not fit their real needs.
Final Thoughts
- You should forget about speculative bubbles or that home prices will fall soon. Home prices will grow or become stable n the next three years. They will not fall.
- If you are planning to move out and sell your home, evaluate your needs and alternatives like renting your home to finance your future home. Each city has its own rhythm, meaning its own demand. Before making any decision, ask for a market analysis in your neighborhood.
- If you need to buy a home, it is better to evaluate your needs, then your resources, and finally take action. For those homebuyers with enough resources, confirm with your lender or mortgage broker what is the maximum value of the home you can afford. For those homebuyers with no enough resources, start adjusting your budget and create a saving plan.
- If you have questions about the market right now, I have the answers.
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