If you’re looking for a home to purchase right now and having trouble finding one, you’re not alone. At a time like this when there are so few houses for sale, it’s normal to wonder if you’ll actually find one. According to the National Association of Realtors (NAR), across the country, inventory of available homes for sale is at an all-time low – the lowest point recorded since NAR began tracking this metric in 1982. There are, however, more homes expected to hit the market later this year. Let’s break down the three key places they’ll likely come from as 2021 continues on.
1. Homeowners Who Didn’t Sell Last Year
In 2020, many sellers decided to pause their moving plans for a number of different reasons. From health concerns about the pandemic to financial uncertainty, plenty of homeowners decided not to move last year. The available homes in the Northern Colorado real estate market has decrease by 52% since January 2020, leaving one month supply of inventory. These folks who are on the fence should know that the number of homes has increased 3% over last year while boasting a 10% increase in sales price, this illustrates the demand.
Now that vaccines are being distributed and there’s a light at the end of the COVID-19 tunnel, it should bring some peace of mind to many potential sellers. As Danielle Hale, Chief Economist at realtor.com, notes:
“Fortunately for would-be homebuyers, we expect sellers to return to the market as we see improvement in the economy and progress against the coronavirus.”
Many of the homeowners who decided not to sell in 2020 will enter the market later this year as they begin to feel more comfortable showing their house in person, understanding their financial situation, and simply having more security in life.
2. More New Homes Will Be Built
Last year was a strong year for home builders, and according to the National Association of Home Builders (NAHB), 2021 is expected to be even better:
“For 2021, NAHB expects ongoing growth for single-family construction. It will be the first year for which total single-family construction will exceed 1 million starts since the Great Recession.”
With more houses being built in many markets around the country, homeowners looking for new houses that meet their changing needs will be able to move into their dream homes. There are many areas in Northern Colorado where new build starts are continuing progress, though with the demand for homes at a very high level, many of these new homes are being put under contract before they are being marketed. Places like Windsor, Timnath, Wellington and Johnstown are in high demand due to limited or no supply of new builds in the larger cities near by, if there is a home not far from where you absolutely want to be, take a look you might find that piece of real estate to be worth the investment.
3. Those Impacted Financially by the Economic Crisis
Many experts don’t anticipate a large wave of foreclosures coming to the market, given the forbearance options afforded to current homeowners throughout the pandemic. The current foreclosure rate in Northern Colorado is hovering around .000136, which remains one of the lowest foreclosure rates in the nation. With the line of buyers waiting for opportunity, there is a strong chance that any home that moves through the foreclosure steps, or listed in the MLS prior to foreclosure, will be purchased rather immediately, which will keep inventory low and steady.
There are also homeowners who didn’t take advantage of the forbearance option or were already in a foreclosure situation before the pandemic began. In those cases, homeowners may decide to sell their houses instead of going into the foreclosure process, especially given the equity in homes today. Lawrence Yun, Chief Economist at NAR, explains:
“Given the huge price gains recently, I don't think many homes will have to go to foreclosure…I think homes will just be sold, and there will be cash left over for the seller, even in a distressed situation. So that's a bit of a silver lining in that we don't expect a massive sale of distressed properties.”
With an inventory shortage nationwide, the pent up buyer demand is looking for answers on how to move forward without being homeless, these three options will bring opportunity as we move through this year. An opportunity that is sure to move swiftly, are you ready to get in front of this wave and be ready to purchase your next home in Northern Colorado?