The laws of supply and demand are real, and the housing market is experiencing them at full bore.
A simultaneous increase in demand for suburban homes and a decrease in available supply has pushed prices up 8.5% year-over-year.
As of the date of this article's publication, for-sale housing inventory is at an all-time low at 3.3 months for August 2020.
Existing home sales - home sales excluding new construction - from the National Association of Realtors shows just how active home buyers have been in the second half of 2020. The country effectively went from near 10-year lows of monthly existing home sales to 10-year highs in a matter of 3 months.
30-year fixed rate mortgage interest rates are at all-time lows. This makes buying a home more affordable because the amount you pay in interest is lower than ever. For example, a $250,000 home financed with a 30-year mortgage at 2.75 % instead of 4.75% will cost you roughly $225 less per month. Buyers budgeting for a specific monthly expense when interest rates were higher, are now able to buy more expensive homes with savings attributable to lower interest rates. Check out our mortgage calculator to see the effect of interest rate on monthly housing expenses.
Let's list out some of the major themes occurring in the housing market:
The housing market is like an iceberg. Above the surface, you have your on-market for sale listings. Below the surface, you have your off-market properties. The total value of all houses in the United States is roughly $34 trillion. The total value of houses currently for sale is roughly $350 billion. Only 1% of the housing market is on-market, 99% is off-market.
You can reach out to property owners and inquire about buying their home. This happens all the time and is commonly assisted by real estate wholesalers. You can buy off-market real estate with us at OfferMarket, we are a marketplace for off-market real estate.
Listing your home on-market is inconvenient and expensive. You need to choose an agent, conduct costly repairs, keep the house clean and ready for last-minute showings. If you are selling a rental property, you may choose to wait for the lease to expire which means you need to carry the cost of a vacant property for an indefinite period of time. The list of benefits of selling your house off-market goes on.
|Market value||$34 trillion||$350 billion|
|Commission fees||Low or None||High|
|Condition||As-Is||Expensive repairs, concessions|
|Time to close||Fast||Slow|
OfferMarket has created a marketplace for off-market real estate and we would love for you to participate.