Many people are asking this question lately – from real estate agents to renters to curious neighbors who see neighborhood homes sell with multiple offers for crazy high prices.
Many in the industry will say the reason the market is so hot is because interest rates are SO low – many buyers with good credit and strong down payments are getting loans at close to 2.5%. I agree that the low rates definitely make people consider buying.
Another theory is that many renters are worried if the pandemic continues for much longer those who own investment property may liquidate to get cash, leaving them scrambling to find a new place to rent (and rental values are high as well right now). As we see more properties go into foreclosure and short sell due to economic and employment challenges from COVID it could definitely cause renters to become concerned. With the low rates many may realize they can own rather than rent (if they have a down payment or are able to get a low down payment loan). But of course some folks are not comfortable with making a big decision during a pandemic.
I feel that the number one reason more people are buying right now is that what is going on in the world is making us realize what is important, and for many it is home. Now more than ever our homes are sanctuaries. Many people feel it would make the most sense to shelter in a home they own rather than a rental property.
Contractors and home improvement stores are slammed right now – most contractors are booked out months ahead. People are doing home improvement projects, spring cleaning, getting rid of things, gardening, and adding on rooms and accessory dwelling units. If you are going to be in your home more than ever, especially if you are working from home, it makes sense to own.
I think the market will remain busy for a bit longer, so we have not seen the end of this elongated Spring/Summer selling season. But at some point it will start to taper off, inventory will increase and demand will drop. For now though the market is hot.