Looking to the Past to Understand the Future

Real estate has been an incredibly hot topic over the past year. With trends that most haven’t seen in decades, there have been many uncertainties and questions regarding the state of the industry throughout 2021.  Currently, you’re likely seeing headlines mentioning the cooling or slowing down when talking about where the market is headed, but understanding these terms throughout the years can significantly help make sense of the current market. 

First, let’s take a look at some figures from the current market…

• 17.2%: the increase in home prices from June 2020 to June 2021 (Forbes)
• 53%: the percentage that US housing inventory decreased on Realtor.com between April 2020 and April 2021 (a 40-year low)
• 74.3%: the percentage of houses that were receiving multiple offers in April 2021, most for over asking price.

Now taking history into consideration, it is easy to see that home sales have been steadily rising since 2014. This past year clearly created an incredibly strong sellers’ market, and we are still seeing an above average number of sales. Additionally, houses are selling faster than usual, so despite these reports that the market is “cooling”, looking to previous years shows that average days on market are still roughly half of the average over a 10-year span. See these charts from Keeping Current Matters to better understand what we mean.

The current numbers are pointing towards a deceleration in the overall US housing market, however this does not imply a “crash” or a “bubble” per se, especially when taking past years into consideration. Yes, things have begun to cool down in the market, and most data shows that the market will continue to loosen up into the new year, but because we saw an unprecedented skyrocketing of the housing market over the past 18 months, this slight dip still leaves the market above average when taking historical context into consideration.

While it may not be the white-hot market from earlier in the year, it is still a very hot housing market. Selling today means you can still take advantage of everything we’ve discussed over the summer, including high buyer demand, multiple offers, and a quick sale, so don’t let the headlines make you rethink listing your home this fall! Contact us today, to learn more and see how we can assist in changing up your current real estate position.