To say that this real estate market is competitive would be an understatement. Fewer listings, rising home prices, and more buyers entering the market is causing bidding wars in many instances. Many of these home buyers are entering the market for the first time. According to the National Association of Realtors® (NAR), the share of first-time buyers in the housing market reached 36% in April 2020, up from 31% in 2018 and 2019.
Despite being one of the most likely demographics to have lost steady employment due to the pandemic, millennials still represent the largest contingent of home buyers in the market today. Meanwhile, the median sales price of single-family homes rose more than 10% in 88% of U.S. metro areas. This has resulted in a rise in the average monthly mortgage payment for a typical single-family home up to $1,040 this month. To add to the competitiveness, active listings on the market are down 40% annually.
Increased demand = increased pressure to buy online
According to an October survey from Realtor.com, nearly half of millennial home shoppers were planning to buy a home sooner than expected because of the pandemic. This increased pressure on the market combined with widespread adoption of technologies to facilitate the home-buying process has resulted in the most competitive real estate market in recent memory.
In some markets, we are even seeing up to 25 – 50% of home offers and/or purchases being conducted strictly online. Due to the sense of urgency, many Americans that are relocating to a new area are getting properties under contract strictly via online showings. Once under contract, many are traveling to view the property in person for the first time during the inspection period. Should they find something that is unexpected or unwanted, they are still able to release and cancel the contract as long as they are within the inspection period.
With the incredibly tight inventory of homes for sale, it is easy to spot which properties will likely sell within a few days. With this said, it is highly recommended that buyers become well educated on their target market in order to be able to move swiftly with offers on properties. As mentioned previously, a buyer that is able to get a property under contract typically still has an inspection period to thoroughly evaluate the purchase.
At Live South Florida Realty, Inc. we have always leveraged the latest technologies to assist our clients. If you are considering a relocation to South Florida, we can help. Contact Live South Florida Realty, Inc. today!