Why 2021 Will Be The Best Year Yet To Sell Your Home
To understand why 2021 will be the best year to sell a single-family home, you first have to understand the pressure that has been on the real estate market for over 5 years, what is driving a sudden increase in demand, what happened to the market in 2019, and why demand will change in 2022.
In this video, John Lynch, Co-Founder of Dwell360 Real Estate, explains these factors and presents three reasons why this year will be better than next to sell, even though we project home prices to increase in our area in the coming years.
For this video, we focus mostly on the single-family home market. If you would like more information on condo and multi family home sales, just let us know in the comments!
Low Inventory
Right now we see extremely low inventory levels in our area and throughout most of the nation. This is not something new. For well over 5 years, as demand has been slowly increasing, the overall supply of homes for sale has not been keeping up.
Then in 2020, the health crisis led to fewer properties hitting the market and even more people looking for new single-family homes.
The lower levels in supply have been due to a number of factors:
- Low foreclosure rates
- New construction not keeping up with potential demand
- Fewer elderly individuals moving out of their homes
- The ability to refinance your home into today’s record low rates
These reasons and a number of other factors have all led to the lowest levels of inventory of single-family homes in the past 5 years in many communities.
Demand
Demand for properties in the Greater Boston Area has been building for well over 5 years because of:
- Historically low interest rates
- More Millenials beginning to purchase homes
- Positive job growth and typically low unemployment in the Boston area
- The dynamic workforce and wide range of highly skilled employment opportunities that attract more people to our region
Then in 2020, while the health crisis devastated the leisure, hospitality, and service industries throughout our area, many other sectors remained strong including higher education, bio-tech, research, finance, and construction, to name a few.
2019
Prior to 2020, we started to see the rate of appreciation of properties dramatically slow. This is something to truly keep in mind. The average values of single-family homes between 2018 and 2019 in some communities declined, was flat in others, and in some communities increased but at a much lower rate of appreciation than in previous years. This provided some relief for buyers and drove more to seek a home.
2020
When the health crisis hit in 2020, individuals who had job security began looking for homes. Many people who may have waited a couple years to consider buying a single-family home were suddenly home shopping.
For so many of our buyer clients who were ahead of that massive rush, they lucked out. For others, it has become a red hot real estate market filled with multiple offers, aggressive strategies, and a frustrating lack of inventory. This has all led to a historically frenzied market with properties often getting anywhere from 6 to even over 30 offers.
Aspects of this activity have actually been taking place in the market for the last 5 years with well over 10 years of home value growth. Those previous buyers set the pace for what is now a supersized and aggressive market.
3 Reasons
This brings us to three reasons why we believe this year will be better to sell then next.
- Sellers will catch on. When your neighbors see homes trading at super premiums in 2021 they will fix, prepare, and sell their homes, increasing the supply and some of the pressure will be relieved from the market. Although in the end, they will get a great price for their home.
- 2019 forecasted what will happen in the future to the real estate market around Boston. Because of the strength of the economy around us, we will most likely see the appreciation of properties well into the future, but that rate will not be as aggressive as it is currently.
- We will at some point see interest rates rise. Though rates will probably be very favorable for quite some time, eventually they will rise and start adjusting affordability. This will tone down some of the aggressive activity in the market.
And one more bonus reason: buyer fatigue. In a world of multiple offers, sometimes not handled well by the parties involved, some buyers will become too frustrated and decide to take time off their search.
What if you are not ready to sell in 2021?
That is perfectly ok. We are really talking to those people who would consider selling in the next 1-3 years and encouraging them to move up their timetable. At the core of any major financial decision is how well it fits with your plan. Does it help you achieve your goals? So for many people now is the time to sell, while for others it is not. Either way, we see a lot of positivity in the Boston real estate market now and in the future. It would be our pleasure to help you navigate the process.
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Dwell360 is an elite residential real estate firm based in Newton, Massachusetts, servicing the cities and suburbs of metro Boston. Dwell360 is a leader in luxury real estate throughout Boston, Brookline, Newton, Needham, and other communities of the greater Boston area and on cape cod. Search for homes in Massachusetts or give us a call!
