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What Does the Real Estate Market Look Like For the Rest of 2021

Everyone knows that throughout the Covid-19 pandemic craziness, the real estate market has been just as crazy! If you are in the market to buy or sell a home, you are probably wondering how long is it going to be this way?!

According to Redfin, in June 2021, home prices throughout the United States, increased 24.8% since the prior year- to a median price of $386,888. During this same time period, the number of homes sold increased 20.6% and the number of homes for sale decreased to 39.6%. 

Throughout this wild real estate culture, mortgage rates have reached record lows and have even started to decline again since late June. For example, the 30-year fixed-rate mortgage was 3.02% as of June 24th and has since dropped to 2.78% on July 22nd. 

While there was a prediction for an economic upturn, this new Covid-Delta variant could stop that instantly. On July 27, the CDC reinstated their recommendation that fully vaccinated individuals in areas of substantial or high transmission risk wear a mask indoors.

I don’t know about you, but I am anxiously wondering if the Covid-19 restrictions are going to return, and how this will impact the housing market. I have my own opinion on the market as a full-time real estate agent. Throughout the first half of 2021, the real estate market showcased a major demand. Whether this was because families realized they hated their current home, they were spending so much time in their homes they reconsidered their timeline for buying or millennials reshuffling. Older millennials that are expanding their families, and weren’t planning to purchase a home until 2022 through 2025 decided to move earlier and dismiss their original home buying timeline. 

Prices skyrocketed because in the rental market there was a 100% increase in the number of people moving to buy a home or even change jobs. It was all demand, unleashed, and exploded into skyrocketing prices. 

Not only did this happen, it happened during the busiest home-buying season which in turn contributed to this surge even more. Typically, when you head into the fall months, activity slows down and prices tend to drop. Currently, many buyers are opting to wait to make a purchase because prices are too high. Inventory is increasing, but I predict prices probably will not decrease as much as normal. 

While the buyers who have been shopping for a while might want a break, as their enthusiasm fades, and they are becoming discouraged,I have seen an increase of new buyers entering the market. If this Delta-variant leads to more lockdowns, quarantines, and mandates, the real estate market will probably react similarly as it did last time. It may not go as far as deterring the buyers that are still motivated to buy throughout the last quarantine but still haven’t found their home. 

I do see a slight change in the current housing market here in Buffalo NY. The buyer demand has shown a decrease, we are still seeing more buyers than homes available, however, we aren’t overwhelmed with a multiple offer situation losing to 30 other buyers as often. Obviously, the increase in inventory is a huge factor. Although the competition is slightly lightening, I don’t see the real estate surge going away any time soon. We may see slight increases to mortgage rates, probably 3.5-3.75% by the middle of the fall, and a slight increase in the housing inventory as we move through the rest of 2021. I don’t anticipate a full switch in the housing market until sometime into 2022 where it would then switch to a buyers market. 

Amanda McNichol

Licensed Real Estate Salesperson

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