An Unusually Active Winter Market

Gone are the days of the predictable patterns in the housing market. In Spring and Summer, we see the market flooded with properties. By Fall and Winter, they have dwindled away. Not anymore. Covid-19 has thrown most industries on their heads, but real estate is among the few to do surprisingly better amongst the turmoil. The culmination of record-low mortgage rates, lack of homes-for-sale, and new homeowner criteria have landed us in a market unlike anything we would have expected this time last year. We are about to enter a season that is known to be the slowest of the year. But most projections point to a strong market heading into 2021. So how did we get here? And how can we make the most of it while it lasts?

How We Got Here:

People’s relationship with their money has changed very quickly in a post Covid-19 world. In search of some relief during the uncertainty, people are saving more money than was expected when this all began. This has allowed people to pay off large sums of debt. So banks find themselves with more money to lend out and are eager to do so. Hence the lower mortgage interest rates – shockingly lower! (see below) Lucky for buyers, the lower the rates, the more home they can afford for less money.

On top of that, we are seeing mass exoduses from high congestion areas like NYC, Jersey City, and Hoboken. Not only do people want more space so they feel safer from Covid-19 exposure, they also have new needs/desires with the switch to working from home. Having enough space and separation so kids can be “at school” while the parents are “at work,” is a huge change from the open concept desires of not so long ago. People who had no intent to move before now find it necessary. Since working from home will likely be the norm for the foreseeable future, the radius people are willing to move away from their place of work has grown.

Where they find themselves running into trouble is the lack of inventory. The market is flush with buyers, but they are fighting over the few properties available. And because they find themselves able to afford more, they are comfortable entering into bidding wars, which drive up final sale prices. Sellers end up making thousands more, and buyers are locked in at record low interest rates. It’s a win-win all around!

What Now?

With the second wave of Covid-19 in full force, people’s concerns aren’t going away. Interest rates are expected to remain low moving into 2021. Buyers and sellers are serious and competitive. Though the Winter tends to see less transactions, it makes sense given the above that this no longer be the case. But for how long? If 2020 has taught us anything, its that we never know what will come next. While this market may very well go down in history, it could change at any moment. Now is both the time to buy and to sell! Having the right agent at your side to navigate these tricky waters quickly and calmly will make all the difference. Get in on the action this Winter…while it lasts!

 

 

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