The spring of 2020 is one that will never be forgotten! Greater Lafayette market has held steady despite the pandemic.
Here are some stats for March and April 2020 compared to the same time periods in 2019 to give you a snapshot of what happened…
Demand Due To Low Housing Supply
A normal market is considered to have a 6-7 month supply of inventory to be considered balanced. We have seen and experienced in Tippecanoe County that a shortage of inventory tends to keep home prices strong and has resulted in multiple offers and bidding wars. Tight inventory is a main reason the ball is still in the sellers’ court. The inventory of existing homes for sale remains below the 6 months needed for a normal market and is only at a 1.7 month supply looking at April 2020. This means, there are not enough homes for sale to satisfy the number of buyers in our market.
Historically, a homeowner would stay an average of six years in his or her home. Since 2011, that number has hovered between nine and ten years. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.
Many homeowners were reluctant to list their homes over the last couple of years, for fear they would not find a home to move into. That is all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you decide to sell.
With demand still stronger than supply, home values should not depreciate.
Many people are asking us if they should buy or sell a home in 2020. Some had put their plans on hold over the past few months with all of the uncertainty. Both buyers and sellers are asking if the market is going to change and when the economy will turn around. Well, with record low mortgage rates, combined with strong pent-up demand from before the pandemic and a new desire to leave urban areas due to the pandemic, are driving buyers back to the single-family home market. It remains to be seen if this is simply the pent-up demand or a long-term trend.
Keeping Current Matters noted that, this spring in the 2020 NAR Flash Survey: Economic Pulse, the National Association of Realtors (NAR) has been tracking the behavior changes of homebuyers and sellers. In a reaction to their most recent survey, Lawrence Yun, Chief Economist at NAR, noted the beginnings of a turn in the market:
“After a pause, home sellers are gearing up to list their properties with the reopening of the economy…Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly payments into future years.”
What does the survey indicate about sellers?
Sellers are busy preparing their homes to make a move this year. More than 3 in 4 potential sellers are planning to sell now that the stay-at-home orders have been lifted and are feeling more assurance in the market which means more inventory for potential buyers.
What are the experts saying?
Here are the thoughts of three industry experts on the subject:
“We note that inventory as a percent of households sits at the lowest level ever, something we believe will limit the overall degree of home price pressure through the year.”
Mark Fleming, Chief Economist, First American:
“Housing supply remains at historically low levels, so house price growth is likely to slow, but it’s not likely to go negative.”
“Two forces prevent a collapse in house prices. First, as we indicated in our earlier research report, U.S. housing markets face a large supply deficit. Second, population growth and pent up household formations provide a tailwind to housing demand.”
So is it the right time to make a move?
Listening to the experts, it seems that prices will remain stable throughout 2020. If you’re thinking about listing your home, connect The Romanski Group so can help you capitalize on the demand in the market now.
(Data from: IRMLS – Lafayette Board of Realtors – Residential Only – April 2020). Quotes and other information sourced from Keeping Current Matters.
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For up-to-date information on YOUR Indiana area neighborhood or a FREE Seller Consultation – call The Romanski Group at (765) 293.9300. Using an experienced team is the way to get your home SOLD! You deserve the BEST Real Estate Team in the Lafayette Indiana area!
