June 2021 Market Update
The real estate market is constantly evolving, influenced by various factors such as buyer and seller behaviors, inventory levels, construction activity, and price appreciation. In this market update, we'll analyze the latest trends and provide insights for both sellers and buyers, along with expert opinions from financial firms. So, whether you're looking to sell or buy a property, this update will help you navigate the current real estate landscape effectively.
Seller Traffic Down: The seller traffic has experienced a decline, indicating a decrease in the number of homeowners listing their properties for sale. This trend can be attributed to several factors, such as uncertainty in the market or a preference for holding onto properties in the face of rising prices.
Buyer Traffic Up: On the other hand, buyer traffic has seen an increase, suggesting a growing interest in purchasing homes. Buyers are actively searching for suitable properties, driven by factors such as low mortgage rates, improved affordability, and the desire for homeownership.
Richmond Month Supply of Inventory (MSI) of Homes: The month supply of inventory in Richmond currently stands at 0.9 MSI, marking a significant 57% decrease compared to the previous year. This low MSI implies a shortage of available homes for sale, leading to increased competition among buyers.
New Construction Slowing: There is evidence of a slowdown in new construction activities. The decline in single-family permits suggests that builders are scaling back construction due to rising costs. This shift in construction activity can affect the overall housing market dynamics and put further strain on the already limited supply of homes.
Price Appreciation and Expert Opinions:
Price Appreciation Forecasts 2021: The real estate market has witnessed substantial price appreciation, with an average forecasted increase of 8.2% for 2021. This robust growth reflects the strong demand for housing and the limited supply available.
Financial Firms' Quotes: Prominent financial firms have weighed in on the real estate market, providing insights into its current state:
- JP Morgan Insights Report emphasizes that the current market is not driven by speculative buying, unlike previous bubbles.
- Merrill Lynch Capital Market Outlook suggests that the ongoing housing expansion is likely to be unusually long and strong, indicating a positive outlook.
- Goldman Sachs Research Note highlights the sustainability of the strong housing demand, further bolstering market confidence.
- Morgan Stanley Thoughts On The Market Podcast emphasizes that the current home price trends are supported by the basic principles of supply and demand, suggesting a stable and sustainable foundation.
For sellers navigating the current market, here are a few strategies to consider:
Price to Invite Competition: Setting an attractive price for your property can generate more interest and competition among buyers. This strategy can potentially lead to multiple offers, providing you with more negotiating power.
Look for an Appraisal Guarantee: Consider offering an appraisal guarantee as part of your listing. This can alleviate buyer concerns and demonstrate your confidence in the property's value.
Selling "As-Is" Is an Option: If you prefer a quick and hassle-free sale, selling your property "as-is" might be a viable option. This approach saves you time and money on repairs and renovations, attracting buyers who are looking for properties they can customize to their preferences.
For buyers navigating a competitive market, here are some tips to enhance your chances of securing a property:
Know What Terms Are Winning Offers: Understanding the terms that appeal to sellers can give you an edge. Consult with your real estate agent to determine the winning elements in offers and tailor yours accordingly.
Set Your Target Below Your Max Price: When establishing your budget, aim to set your target below your maximum price range. This allows room for negotiation and potentially helps you secure the property within your budget.
Hang In There: In a competitive market, it's important to remain patient and persistent. It may take time to find the right property and succeed with an offer. Don't get discouraged and keep searching until you find the right opportunity.
Conclusion: The real estate market is experiencing dynamic shifts, with decreased seller traffic, increased buyer demand, and limited inventory. While sellers can utilize strategies such as pricing, appraisal guarantees, and selling "as-is," buyers need to be aware of winning offer terms, set realistic targets, and maintain persistence. Expert opinions from financial firms indicate confidence in the market's sustainability and long-term growth. By staying informed and adapting to the evolving market conditions, both sellers and buyers can make informed decisions to achieve their real estate goals.