Buying a Home Today
Strategy is perhaps the number one skill that a homebuyer needs to have in addition to a down payment. Actually, a down payment and a job that is resistant to pandemics and the economics of a pandemic.
Up until February of 2020, even though inventory was shrinking, there were still homes available on the market that buyers could choose from. Now that most markets are experiencing significant and historic inventory shortages, buyers are having to be better prepared, and possess a lock-and-load mentality.
Home builders are still trying to catch up to the demand for housing, but now even builders are facing constrictions on their production by such factors as the historic increase in the cost of lumber, in some cases rising 400% from the same time in 2020. Builders are also dealing with issues of skilled labor shortages and available buildable lots.
Right now, according to Fannie Mae, the homebuyer sentiment has fallen below the 50% level, to just 47%, a drop of 5 percentage points. In addition to the buyer sentiment, some buyers feel that it has become a bad time to buy a home for a number of reasons.
The availability of starter homes has almost been erased by all-cash buyers and home flippers, who have been eating away at the low-priced end of the inventory market for years. With the median household income in the United States climbing to $69,000, homes continue to appreciate at a faster rate, selling for ever higher amounts. In New Jersey, the average price for a home sold increased by over $24,000 from 2020, year-over-year.
The trajectory of the housing market continues to penetrate new plateaus, with 48% of homes selling for more than the list price. In addition, they’re selling faster than ever before, according to Redfin; it took only 19 days on average to sell a home during a four-week period ending May 2nd. This pace is the fastest ever recorded since these records have been kept for the last 10 years. Until this point, the average time it took to sell a home in 2020 was 35 days.
Now, it’s not just an inventory problem, the high cost of lumber, but also mortgages rates are beginning to creep higher adding more cost to the runaway home prices.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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