Here in Dane County, the spring market is back with a vengeance.
The spring market is back with a vengeance. After a full year of dealing with COVID-19 here in the U.S., a vaccine surge is on the horizon, and the economic outlook is positive. March, a historically active month for the market, is once again poised for strong performance.
Home prices continue to surge despite a slight dip in demand. The recently released S&P CoreLogic Case-Shiller 20-city price index shows that home prices have been increasing at the fastest rate since 2014. Of the 20 cities surveyed, Phoenix, Seattle, and San Diego led the pack. In Dane County, median home prices rose 15.5% in February year over year.
It was also reported at the end of February that total mortgage application volume fell by 11.4%. That’s largely due to interest rates climbing back up into the high 2s and low 3s. While it’s clear that 2021 won’t be a second consecutive year of watching rates limbo to new lows on an almost monthly basis, the Fed still intends to keep rates artificially low. Furthermore, millennials—the largest generation in American history—will continue to pour into the market after helping Zillow’s traffic skyrocket to 9.6 billion visits last year.
What can thaw our market? An uptick in inventory would certainly do the trick. An intensified seller’s market emerged in the wake of the pandemic. It has led to homes in some markets fetching a jaw-dropping number of bids before going under contract for tens of thousands of dollars over list price.
However, it also hampered sales a bit. “Pending home sales fell in January because there are simply not enough homes to match the demand on the market,” said Lawrence Yun, chief economist for the National Association of Realtors. With more sellers primed to enter the market, weary homebuyers may find a smidgen of relief—but they still won’t be calling the shots. (Offers over list price will still be par for the course).
Home prices have been increasing at the fastest rate since 2014.
Would-be sellers who sidelined their plans last spring due to COVID-19 may feel more optimistic this year. They’ve watched the 2020 housing market triumph in the face of adversity, and they’re seeing consumer confidence rise.
More inventory this spring could grease the wheels of the housing market and lead to huge increases in sales. What does this mean for you? Though some buyers may be deterred by interest rates ratcheting up a bit, many more are rushing to lock in affordable monthly payments while they still can.
For sellers, the competition will increase markedly over the next few months. Netting top dollar is still more than possible, but overpricing a home and failing to prepare it for the market are losing strategies. Buyers and sellers alike need to work with a skilled professional to navigate this March market madness.
If you’ve even been entertaining the idea of selling your home at all this year, I invite you to use my home valuation link to see what your property is worth. If you want an even more accurate picture of what your home could sell for, reach out to me personally. I’m talking to both buyers and sellers around Dane County every day, and I can help you make the right decision for whatever you decide to do.