Is This a Bubble? Q1 Update

Well, Q1 in the real estate market presented itself as a STRONG seller’s market that continues as we speak. Sellers are netting 10’s of thousands over list price on most properties, and sometimes over appraisal price, with buyers bringing additional funds to the table to cover the difference. The reason: continued staggeringly low inventory. Take a look at the year over year numbers for new listings by week for the first quarter:

The good news is that the last week reported ending 4/10/2021 showed a 27.1% uptick in new listings – which is phenomenal given what the previous weeks have brought us. Overall we are still down 6.2% in terms of new listings. Spring in Minnesota always brings more homes to the market than any other time and we are banking on it for our long list of hopeful buyers. Our own team has 4 (and counting) new listings coming in May and we believe we will continue to see more inventory this spring. 

he increase in pending sales indicates that offers are being written and accepted at a VERY fast pace. Q1 shows an 8.7% increase in pending sales while inventory of homes for sale ended the quarter with a deficit of 41.3%!

Despite this, affordability continues to be excellent with interest rates in the 3.3% range, but it has taken a dip this year. 2020 saw a Housing Affordability Index of 146. Currently it sits at 137. For perspective, in 2008 it was 120, and in 2012, what is known as the bottom of the market during the recession, it was 280. 

Bottom line: Overall, sellers are reaping the benefits of increased net proceeds and buyers, while in stiff competition, are also still reveling in the purchasing power that low interest rates offer.

I’d love to consult with you about the sale of your property if you have any thoughts of doing so. The biggest question we get from sellers is: I WANT to sell and capitalize on this market but how do I do that and secure a home to purchase? We have suggestions and strategies. Don’t hesitate to reach out!

This Isn’t a Bubble. It’s Simply Lack of Supply. 

Some Highlights

• In a recent article, Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), discussed the state of today’s housing market.
• When addressing whether or not today’s high buyer competition and rising home prices are evidence of a housing bubble, Yun said that this “is not a bubble. It is simply lack of supply.”
• Today’s housing market is healthy, and rising prices are driven by real buyer demand. Let’s connect to talk about the best ways to navigate such an energetic market.

TREND ALERT!  Trending Kitchen Designs so far in 2021 

This Trending Now story features the most-saved kitchen photos uploaded to Houzz since Jan. 1, 2021.  Any snapshot of popular kitchen photos is bound to feature a wide range of styles and features. And the following countdown of the most-saved kitchen photos so far in 2021 is no different. But a close look shows that a focus on hardworking storage, an airy layout and lots of white and wood is an approach that will often lead to an outstanding kitchen design.
Link to read all about it!