Many people have compared today’s market to that of the one we saw back in 2008 during the Great Recession, so let’s first discuss how the markets compare.
Back in 2008, many investors were buying properties, there were straw buyers, and interest rates were completely different. We had a ton of inventory, but the properties that were being purchased didn’t make up for the amount of demand that was in the market. Additionally, home loans were much easier to get, and many didn’t even require income or employment verification. Those conditions created the perfect storm that led to the housing crisis.
Today’s market, however, is completely different from the one in 2008. Even amid the pandemic, there is still activity, but there’s not the same rush to buy and sell as we’d normally see around this time. We’ve also had to adapt to the changing world, including incorporating 3D technology to allow buyers to tour homes virtually. This has helped our business by enabling out-of-state buyers to view and make offers on local properties.
Furthermore, interest rates are incredibly low—the average rate is currently hovering at around 3.5%. These historically low interest rates are driving activity and demand.
Lastly, today’s market has a much lower inventory than it did back in 2008. Compared to just a year ago, the number of listings is down by 20%, but the number of homes under contract is up by 13%.
Here’s another interesting fact: The multiple listing service has adjusted the way we market and sell properties, meaning that where before we could market a property as ‘coming soon,’ we now have to give it ‘off-market’ status. We have 18% more off-market properties this year than last.
The homes that are on the market are also selling incredibly quickly. We recently had a $960,000 home that we marketed and sold within two business days for full price. There was another, $650,000 home that we sold at full price in just 10 days.
Though there is a lot of demand for homes, we’re still prepping our properties to ensure that we get the maximum price for them. We use a 75-point staging checklist to make sure each property is best positioned for a great sales price in addition to our marketing strategies to attract buyers to the homes.
Looking ahead, we anticipate positive trends in our market. Many of the people who have lost their jobs due to the pandemic have been either renters or homeowners that lived in very affordable housing. That means that if for some reason, we do see more foreclosures on the market in the future, there’s enough demand for buyers and investors to purchase those. This could be an opportunity to buy and hold properties to assist with retirement plans.
So if you’re a renter or homeowner who is realizing that your home is just too big or small for your needs, now is a great time to buy; interest rates are low and rental rates are high.
If you have any questions about buying or selling property or the market in general, don’t hesitate to reach out to us. We’d be glad to help you no matter what you’re trying to accomplish.