Posted: 2021-03-24 | Author: Richard Simon
If you are planning on buying a house soon, you are entering into a competitive market where housing inventory is scarce. You may have already noticed this during your house hunting. When you do a home search, you’ve probably noticed that many properties for sale show a status of “pending” or “contingent”. If you’ve gotten to the point where you’re submitting an offer, your real estate agent may have mentioned that there are several other offers for the same property. Things are expected to continue this way for the rest of the year.
Most experts predict a very strong real estate market for 2021, driven largely by historically low mortgage rates, which has resulted in unprecedented demand and a severe shortage of available homes for sale to meet that demand. Back in January, the National Association of Realtors (NAR) reported that housing inventory had sunk to a historic low of 1.07 million available properties nationwide, or a 1.9 month supply.
According to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, home appreciation increased in 2020 at an average rate of 10.4% nationally, the largest year-over-year jump in seven years. Phoenix led all cities surveyed with year-over-year prices rising by 14.4%. Now that might all sound like ominous news for Phoenix area home buyers, but things are not actually as bad is you might think.
What Does Record Low Housing Inventory Mean for You?
The home buying process might be a little different than what you have experienced in years past, but even though housing inventory is low, it is still a great time to buy for those who are qualified, prepared, and patient. Buying a house in this market requires you to be proactive, and it is also critical to work with experts who know and understand the Phoenix area market.
Here are some of the most important things to keep in mind as you begin your house hunting:
At AZ Lending Experts, we provide buyers that qualify with an on-time closing guarantee that not only guarantees the seller that the buyer is prequalified and preapproved, but also that the loan will close on or before the stated close of escrow date. If this does not happen, we will pay the seller $750 out of our own money. Everyone hates delays in the closing process, and this guarantee can often be the deciding factor that tips the scales in your favor.
Housing Market Outlook for the Year Ahead
As stated earlier, the housing market is expected to remain strong throughout 2021. Home builders and construction companies have significantly ramped up housing starts during the past year, but it will probably take at least another a year or so for available housing inventory to adequately meet the strong demand. The good news for buyers is that even though inventory is low, it is still an ideal time to buy a house without busting your budget because of historically low interest rates.
Whether you are buying or selling or doing both, the key is to understand what this market means for you and assemble the right team of experts to successfully guide you through the process. When you are ready to get started, contact us or request a free consultation with one of our local lending specialists!