Competition returns as buyer demand rises
There is growing evidence that home buyer demand is beginning to bounce back.
After plunging in March, as coronavirus-related stay-at-home orders were put in place, buyers are coming back to the market and expressing interest in available homes for sale.
But they may have some surprises in store. That’s because, while the coronavirus has shocked the economy and disrupted the beginning of the spring sales season, it hasn’t led to a decline in home prices.
In fact, it’s caused the already low inventory of homes for sale to fall further, which means there’s a chance active buyers could find themselves in competition for the homes that are available.
And since competition drives prices higher, as qualified buyers compete to outbid each other, there’s no expectation that prices will fall significantly any time soon.
In other words, while housing market activity has slowed, the downturn has only amplified the market’s existing challenges.
That means, there are still more prospective buyers than available homes for sale, which may result in competition for good homes.
With Freddie Mac’s recent market forecast of stable home prices and low interest rates for next couple of years, this further proves that you may be in for some competition if you’re in the market to buy soon.
As always, consulting with your local pro and getting some sense in your local market trend is a must.
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