Will the Supply of Homes Catch Up with Increasing Demand?admin / 0 Comments /
The global pandemic brought the U.S. real estate market to a screeching halt during the spring months of March and April. With stay at home orders in place and uncertainty among Americans about the best ways to stay safe from the spread of COVID-19, many sellers decide to hold off or cancel listing their home for sale. However, May has brought loosened restrictions for business and social interactions, leaving Americans feeling that it may be safer to resume some activities that had been put on the back-burner. Specifically, Americans that want to purchase a new home are beginning to ramp up their search and even make offers to purchase homes.
However, the fact remains that the number of homeowners listing their homes had been steadily declining. And despite a small up-tick, the supply for homes continues to be low, down by almost 30% annually as of the first week of May. Nevertheless, there is a significant number of potential home buyers that are looking to take advantage of low mortgage rates. Not to mention, many Americans have spent more time in their current homes during stay at home orders, helping them realize they need a larger home, perhaps a home office or more outdoor space. These factors have helped drive up the demand for homes in many parts of the U.S.
CNBC.com published an article by Diana Olick that describes a major uptick in bidding wars for homes as a result of the mismatched supply and demand. In fact, the article says, “More than 41% of homes faced a bidding war in the four weeks ending May 10, according to Redfin.” Realtors in areas such as Boston, San Francisco and Fort Worth, Texas, indicate that more than 60% of purchase offers are met with competition from other buyers.
Read the entire article.