The housing market has been gaining strength. In November 2020, existing house prices grew by 15% compared to the previous year (pre-COVID). Market trends for 2021 indicate that buyers will face high competition as inventory remains low.
Current Housing Market: Seller's Market
Forget the low start in 2020, since the last two quarters of the year made up for the slow spring season.
- Average Days On Market (DOM): As of February, in the 50 largest U.S metros, this trend continues. A home that would take an avg. 48 days to sell, this year spends 12 days or less on the market than last year.
- Prices keep going up, up, up: Among the 50 largest metros, listing prices grew at an average rate of 10.9% compared to last year (and above the pre-COVID baseline). This month, prices accelerated in all regions compared to the previous month.
- Housing market demand: Homebuyer demand has slightly decreased, as prices and mortgage rates increased. Yet, the housing demand remains higher than last year’s (pre-COVID).
Real Estate Trends Investors Need to Know
Trend #1: Fewer and less profitable foreclosure properties: properties with foreclosure filings have gone down 80% from a year ago. And, according to Auction.com, foreclosed properties are selling for 86% of their market value.
States with the highest foreclosure rates were:
- Delaware (one in every 4,923 housing units with a foreclosure filing);
- Louisiana (one in every 6,581 housing units);
- Florida (one in every 7,920 housing units);
- Indiana (one in every 8,668 housing units); and
- Alabama (one in every 8,707 housing units).
Trend #2: Lower interest rates: lack of economic activity caused the Federal Reserve to provide more funding, and interest rates went down. Low mortgage rates increase housing demand from buyers who want to take advantage of those rates.
Trend #3: Exodus to the suburbs: “Even before the pandemic, homebuyers looking for affordability were finding it in areas outside of urban cores. The pandemic has merely accelerated this previous trend by giving homebuyers additional reasons to move farther from downtown,” said Danielle Hale, chief economist at Realtor.com. For flipping investors, this means that more suburban and rural areas are now desirable areas to venture.
Trend #4: Rental Income Opportunity: due to a combination of trends mentioned above, rents in major tech hubs are declining, but in some markets, rent growth is increasing by double digits.
Trend #5: Mobile or Online Interactions: due to the pandemic, online real estate services became almost 100% virtual – virtual tours, virtual showings, virtual agents, and virtual buyers. As the housing market started to recover in the mid-summer of 2020, house sellers turned to online:
- Skip listing: The promise of a hassle-free sale, with no repairs or showings is appealing, and sellers are willing to make less profit. Note: less profit is still more profitable than what they expected to receive before the house price increased.
GoForClose Helps Investors Stay Competitive
- Our exclusive homeowner list identifies motivated sellers who haven’t hit the Vacant/Tax Delinquent/Bankruptcy list YET!
- Using marketing automation and highly trained REI VAs, we stay top of mind through mobile and online communications.
- Our lead generation and marketing software integrates with multiple Real Estate Investing CRMs, so you receive the lead as soon as they pre-qualify.
Digital marketing allows us to remove the guessing out of marketing and focus on what works for each client in their particular market.
Our team of experts in Real Estate Investing and Marketing help you stay competitive, using a combination of data, marketing and people.
If you have questions or are curious to know more, request a free consultation below.