Why Are We in a Seller's Market?
2021 is currently experiencing a seller’s market. A seller’s market, simply put, is when there are more home buyers than there are home sellers. This gives seller’s an advantage because houses have a high demand but a limited supply. Sellers are basically a rare find in this type of market.
As Demand Exceeds Supply, Prices Go Up
This seller’s market is highlighted by offers above a home’s asking price. Why? When demand exceeds supply, prices go up. Ten buyers may want the same home, so they will enter bidding wars in order to secure their rare find.
Why is Supply Low?
Supply is low for a reason, it didn’t just happen randomly. Much of this is due to the 2020 pandemic. Well, I know that the pandemic seems like it happened overnight, but the real estate market is bound to be affected by unforeseen circumstances. People stopped selling their homes in a time of economic uncertainty. Many people don’t know where they would go if they sold their home. “The pandemic really changed how people look at and prioritize their homes, and that mindset is not going to change anytime soon,” says Kris Lindahl, CEO and founder of Kris Lindahl Real Estate in Minneapolis.
The South Florida Boom
South Florida has become a target destination during the pandemic. Peter Lane Taylor from Forbes says that an open economy, relatively low COVID-19 case counts and no state income tax are just a few reasons for this boom. The demand for homes here is higher than usual, leading to an even more intense seller’s market.
What Can Buyers Do?
The possibility of bidding wars is stressful! Buyers can prepare and take a few prior steps beforehand. A mortgage pre-approval can always give you an advantage. You also should not look for home’s at the very top of your budget. This will provide you more financial flexibility when a home’s price rises during bidding.
A great real estate agent will understand how to negotiate. Here at The Fuchs Group, we will go the extra mile to help you as a buyer in this seller’s market!