Moving on to the second half of the year, one thing is clear: the current real estate market is one for the record books. It is evident that the exact mix of conditions we have today creates opportunities for both buyers and sellers. Take a look at the four key components that are shaping this unprecedented market.

A Shortage of Homes for Sale

At the start of this year, the number of homes available for sale fell to an all-time low. However, in recent months, inventory levels are starting to trend up. The latest Monthly Housing Market Trends Report from realtor.com says:

“In June, newly listed homes grew by 5.5% on a year-over-year basis, and by 10.9% on a month-over-month basis. Typically, fewer newly listed homes appear on the market in the month of June compared to May. This year, growth in new listings is continuing later into the summer season, a welcome sign for a tight housing market.”

This is good news for buyers who crave more choices. Although we’re experiencing small gains in the number of available homes for sale, inventory remains a challenge in most states. That’s the reason why it’s still a sellers’ market, giving homeowners immense leverage when they decide to make a move.

Buyer Competition and Bidding Wars

Today’s ongoing low supply, along with high demand, then creates a market characterized by high buyer competition and bidding wars. A lot of buyers are going above and beyond to make sure that their offer stands out from the crowd. Either by offering over the asking price, all cash, or waiving some contingencies. The number of offers on the average house for sale broke records this year – which is great news for sellers.

The latest Confidence Index from the National Association of Realtors (NAR) says the average home for sale receives five offers (see graph below):

For most buyers, the best way to put a compelling offer together is by working with a local real estate professional. My Tampa Agent can act as your trusted advisor on what terms are best for you and what’s most appealing to the seller.

Home Price Appreciation

What drives the prices up is the competition among buyers. Over the past year, numerous home price appreciation rises were seen across the country. According to the most recent Home Price Index (HPI) from CoreLogic, national home prices increased 15.4% year-over-year in May:

“The May 2021 HPI gain was up from the May 2020 gain of 4.2% and was the highest year-over-year gain since November 2005. Low mortgage rates and low for-sale inventory drove the increase in home prices.”

Rising home values are a big part of why real estate remains one of the top sought-after investments for Americans. For potential sellers, this can also mean it’s a great time to list your house to be able to maximize the return on your investment.

A Rise in Home Values and Equity

Equity in a home doesn’t just grow when a homeowner pays their mortgage – it also grows as the home’s value appreciates. Thanks to the jump in price appreciation, record-breaking gains in home equity were seen by homeowners across the country. CoreLogic recently reported:

“…homeowners with mortgages (which account for roughly 62% of all properties) have seen their equity increase by 19.6% year over year, representing a collective equity gain of over $1.9 trillion, and an average gain of $33,400 per borrower, since the first quarter of 2020.”

That’s leverage and a major perk for households. Equity can be used by homeowners to accomplish major life goals or move into their dream homes.

Bottom Line

When you’re thinking about buying or selling, there’s no time like the present. Talk to My Tampa Agent about how you can take advantage of the conditions we’re seeing today to meet your homeownership goals.

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