The residential real estate market in the United States plays a significant role in the economy. Healthy demand for housing is an indicator that consumers are confident in the economic outlook. The current housing market is characterized by high demand and low inventory levels. Knowing these fundamentals empowers you to make smarter real estate decisions. If you have been following the housing market, you know that prices have risen at a very rapid pace over the last few years. In fact, home prices have increased at an average of 41.3% since the pandemic began in 2012. The only reason this is happening is because of new market indicators that were triggered by the pandemic. Those new market indicators include higher than-usual levels of churn in the housing markets due to high levels of migration away from city centers and into suburban areas. This creates a situation in which homebuyers have to compete with each other for the same limited selection of homes. This has made it difficult for many buyers to get the home of their dreams. It also created a shortage of available inventory in some areas, which caused price pressures to rise. Whether you are a home buyer or seller, it’s essential to understand inventory levels in the housing market. They are a great indicator of what to expect in the coming months, as well as how the overall market is doing. When inventory is low, buyers can feel overwhelmed with choices and options. Having more homes available to choose from can give them peace of mind and help them find their dream home faster. If inventory starts to rise, it means that more sellers are listing their homes for sale. New construction also helps to boost the stock. For example, Coeur d’Alene, Idaho, saw inventory jump 54% between late March and early May. While that level is still significantly lower than it was prior to the pandemic, it’s certainly an improvement from what it was in February. As the housing market moves through cycles, it’s essential to understand how to navigate it. This includes knowing the difference between a buyer’s and seller’s market. A buyer’s market occurs when housing inventory is high, and there are a large number of potential buyers. This gives buyers more leverage in the real estate transaction and makes it easier to buy a home at a better price. There are several factors that can cause a buyer’s market. One of the most common is a change in interest rates. Rising interest rates reduce a buyer’s purchasing power and make it harder to afford a home. In addition, there are also changes in the local job market that can cause a decline in demand for homes. If you’re looking to purchase a home, it’s essential to know what the housing market is like. Buying a home is an exciting and essential investment, but it’s also a huge commitment that will take up a large portion of your financial resources. In a seller’s market, you must act quickly when you find a home that fits your needs. Hesitating to make an offer can mean losing your dream home. One way to navigate a seller’s market is by getting a mortgage preapproval. This will show the seller that you can afford to buy their property and will speed up your mortgage approval process. Another way to stay on top of the market is by utilizing the services of an experienced real estate agent. These professionals can help you speed up your home search and keep up with the latest home listings. They can also assist you in negotiating with a seller. They will be able to provide you with the advice and support that you need to close your dream home successfully.
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