Friends and Clients —
The real estate market continues to surge ahead. However, clouds might be forming on the horizon for sellers. Let me give you the details:
1. Ultra-low mortgage rates
Throughout 2020, the popular 30-year fixed mortgage rate set 15 new record lows.
It ended 2020 just one basis point higher than the latest record low and currently stands at 2.86%, a full percentage point lower than one year ago.
These ultra-low mortgage rates are driving an increase in demand. Unfortunately, sales are restricted due to…
2. Record-low inventory
There were just 1.28 million homes available for sale at the end of November, the last month for which we have full data.
That is down 22% from a year earlier. It is also the lowest inventory count since the National Association of Realtors began tracking this metric in 1982.
Unsurprisingly, home prices are shooting up thanks to strong demand and record low inventory.
The median price of an existing home sold in November was a staggering 14.6% higher than in November 2019.
If you’re worried this pace is unsustainable, you might be right:
3. A change in the market?
Some experts warn that home prices are overheating and that affordability is suffering.
They might have a point because, after five consecutive months of gains, closed sales of existing homes lowered in November.
Similarly, after three straight months of record highs, homebuilder confidence in December dropped 4%. December mortgage applications also fell.
So what does this all mean for you?
Well, things might get harder soon for home sellers.
Lower affordability could hurt demand, and the price growth we’ve seen over the past months might slow down, or prices might decrease like we started to see before the pandemic.
Fortunately, nationwide trends haven’t caught up to us yet in Richmond.
Demand is still very strong. If you were to list now, you could sell quickly and at top dollar.
If you’d like to get an idea of what your home is worth right now, you can use the following home value calculator, which is based on recent Richmond sales:
If you are considering selling while the current market lasts, give me a call at 804.237.8585. I’ve helped many people sell in these pandemic circumstances, and I’m here to answer your questions and help however I can.
If you have a friend or family member thinking about selling it would be my pleasure to earn their business. Don’t hesitate to call me and I promise to take great care of them.
Have a great day,