Historically, the best time to sell a home is in the spring and summer real estate markets. This year, the best time may actually be now. Lawrence Yun, the Chief Economist of the National Association of Realtors predicts that the 2021 winter real estate market, through the middle of March, is going to be the best winter market in history.
It's no secret that there has been a shortage of homes on the market in recent years. The inventory of homes, or supply, is low and demand for homes is high. It's a great seller's market right now, as most home values are at their highest levels since 2006 / 2007. There are so many motivated buyers on the market right now that sellers are ending up with multiple bids on their homes again. In many markets, buyers are paying list price or more.
An economist at Zillow, Matthew Speakman, states there is currently less than a 3-month supply of homes on the market. He says the supply is "the lowest on record since the turn of the century." This might not last long, however. On January 21, 2021, Chief Economist Yun shared that home construction ended the year with 1.669 million units started. This is the largest amount since 2006. He predicts that the worst of the housing shortage will end soon. When there are more homes available for sale on the market, prices may start to level off. It is probable that you'll receive more money for your home if you sell now, before inventory loosens.
The Millennials & Low Interest Rates
The population of millennials looking to purchase homes has exploded and is in full force. According to Forbes.com, millennials currently make up about 38% of homebuyers. Now turning 30, they are paying off student loans, getting married and having children. Their life circumstances place them in the market to purchase homes right now. Taking advantage of the still low interest rates, more millennials are getting approved to purchase homes.
As interest rates have been at historical lows for quite some time, this won't last forever. Nadia Evangelou, an Economist, expects mortgage rates to rise moderately this year. This may take some homebuyers, millennials in particular, out of the market to purchase homes.
Mortgages in Forbearance
As part of the CARES Act in 2020, borrowers were allowed to suspend their mortgage payments and place their mortgage loans in forbearance to help manage their finances due to the Covid 19 financial crisis. At the end of December 2020, approximately 5.49% of homeowners did this, according to an article in housingwire.com. Many of these borrowers will have to resume paying their mortgage payments as early as the end of March. Others who didn't take advantage of the forbearance program are now delinquent on their loans. There is fear of possible mass foreclosures. This will likely have an impact on home values if too many foreclosed homes hit the market.
If you are thinking about selling your home in 2021, get started today. Contact a local real estate agent or visit a site such as upnest.com to compare real estate agents and receive commission quotes with no obligation. There is a pent-up demand for houses right now but no one has a crystal ball to reveal how 2021 will play itself out.