Market Review as of March 2021- Provided by Allison Simson

Market Review as of March 2021- Provided by Allison Simson

As we roll into the spring real estate market, there is more demand and less supply of homes than we have ever seen. The Summit Association of Realtors market stats tell the story.

As of this writing, 322 sales in 2021, 37% higher than first quarter 2020.  There are 125 properties available for sale here at the end of March, down 56.1% from last March.. The months supply of inventory is 1.3 months, down 60.6% from 3.3 months last March.

With the increased demand and diminishing supply, prices continue to rise. The average sales price is up 14.1% in March compared to last March and the median price is up 11.8.

National Association of Realtors Chief Economist, Lawrence Yun, is predicting all of 2021 to be a great real estate market in Colorado. He quoted economist from Realtors, Builders, Mortgage Bankers, Core Logic and more all predicting interest rates at year end between 3% and 3.6%.

 With so much that happened recently, you might be wondering how it’ll impact real estate trends for the remainder of 2021. Here are a couple of trends to watch.

Trend #1: Slim Pickings for Buyers

But don’t worry, we’ll walk you through what to expect if you enter the market and guide you to getting a property that works for you.

What this means for Buyers:

Low inventory means you need to be on your toes when you go house hunting—the best homes will likely be snatched up fast. In November 2020, more than 7 in 10 sold homes were on the market for less than a month. That doesn’t leave much time to hem and haw over your home search. If you want to find a good home in this slim market, here’s some advice:

Sacrifice some wants. If you can’t find the house you want, be willing to give up some “nice-to-haves” for your “must-haves.” Find the least expensive home in the best neighborhood you can afford and upgrade over time.

Expand your search. What if the location where you’re planning to buy is too competitive? You might be surprised at the gem you can find in a less popular neighborhood. Working with an experience real estate agent who really knows the area is the best way to find a home that fits your budget and lifestyle.

Get preapproved ASAP. Getting preapproved for a mortgage before you go house hunting is a must in any market. But in a market with such a limited home supply, not doing this legwork ahead of time gives a preapproved buyer a stronger chance to swipe the place you want right out of your hands.

What this means for Sellers:

Low inventory means low selling competition! You are probably being inundated with offers to buy your place already.  Since your home will be one of the (relatively) few listed on the market, you could be in the driver’s seat. So enjoy possibly picking the best offer and moving at a pace that best suits your timeline.

Trend #2: Prices Are Still Rising

In November 2020, existing home prices grew by a whopping 14% compared to last year—Sellers, this should put a big smile on your face! And hang tight, buyers—we have some advice for you too.

What Higher Prices Mean for Buyers:

If you’re going to buy a property in our second home market, you absolutely must find out how much house you can really afford. Commit to staying within that budget amount no matter how much pressure you feel watching competitors pluck good homes off the market- you’ll avoid buyers remorse down the road.

What Higher Prices Mean for Sellers:

You’ve done well! A nice profit may be on the horizon! To get the best offer for your home, work with an experienced real estate agent who really knows your local market.

The trick can be negotiating the multiple offers you are likely to receive.  Price is not the only factor.  Again, working with a Broker experienced in multiple offer negotiations is essential.
Worried about capital gains taxes? How about doing a 1031 tax deferred exchange. We’ve handled tons of them.  Ask us how!

What if I’m Not Buying or Selling a Home This Year?

You may be thinking, All this is great, but we love our place and we’re not planning to go anywhere. We hear you, and here’s what you should know for now:

1. Equity probably won’t decrease through 2021.

With most housing markets at low risk for a downturn, Freddie Mac believes home prices will continue to rise in 2021—but at a slower pace of nearly 3-5%. This is still good news for sellers because you’ll likely make a nice profit when you do decide to sell. Continue to monitor how much your home is worth to make sure your equity is going up. We are happy to do an equity review with you anytime!

2. A real estate market crash looks unlikely.

With all the uncertainty behind everything that happened in 2020 and with home price growth possibly slowing down in 2021, you might be wondering if the housing market could collapse. Well, it’s impossible to know for sure, but economists suggest a housing crash is highly unlikely.

We would be honored to help guide you!

With myriad factors at play, it’s challenging to neatly summarize the crazy trajectory of our distinctive real estate market here in the mountains, but one thing is certain … from buying frenzies, record-low inventory, a trend from second homes to primary homes and more, it’s so critical for buyers and sellers to work with a real estate agent who brings experience and deep market knowledge to the table.