Home prices are significantly rising in this market. We are seeing existing home prices jumping to a new record high of $334,500, according to data from the National Association of REALTORS®. In comparison to the median price of newly built homes that are $330,800, according to U.S. Census Bureau data, it seems as though existing home prices are increasing but not more than newly built homes, despite what the data suggests.
Even though home prices are at a record high, it doesn’t seem to be scaring off home buyers. In fact, the annual price growth reached 17% in March compared to last year. Homes are flying off the market just even after a few days or a week if you are lucky.
All of this is coming from the boom that the pandemic has created with record-low mortgage rates and the demand to move with remote work becoming more normal. With the pandemic forcing people to stay home and in turn, forcing people to save money, people are flowing with cash and wanting to spend it on a new home.
Not only are people buying primary homes, but many buyers are also looking for secondary homes, or vacation homes. The number of buyers who locked in mortgage rates for second homes soared 178% year over year in April, marking the 11th straight month of 80%-plus growth, according to Redfin.
Redfin Chief Economist, Daryl Fairweather, explains that the increase in the buying of vacation homes comes from wealthy Americans working remotely and having the freedom of not being tethered to a specific location for work. This new “normal” is giving them the freedom and opportunity to buy vacation homes as they continue to earn money and work remotely.
If you are being beat out by all cash offers even if you are significantly going over the asking price, hang in there. People just want cash in their pockets and all cash offers are quick and easy. On the flip side, all cash offers highly increases your chances of winning a home in a competitive situation, by 290% according to Redfin.
With how hot the market is right now though, no one is guaranteed that their plan will work. Homes are going for thousands of dollars over the asking price, so it just depends on the situation of whether you are in good shape or not.
Even though the market is crazy and fast-paced these days, contact a real estate agent to guide you through the process with ease!