While older homeowners are holding off on selling until next year, others are choosing to buy their first homes in 2020.
Dr. Frank Nothaft with Corelogic, a company that studies data to better understand the housing market, said the market is hot, but not necessarily for buyers.
“Prices in Louisville are going up right now,” he said. “They’ve been going up all summer. That’s in part because of a shortage of supply.”
While this market sounds good for sellers, the coronavirus pandemic is still causing issues because, with so much financial instability, people aren’t likely to move right now.
Dr. Northaft said older homeowners in particular are holding off on listing their homes.
“They’re saying, ‘Hey, I’ll wait it out… I’ll wait ‘til next year when the pandemic has passed.’ That’s part of the shortage of supply,” he said.
So, what does this mean for a potential buyer? Low supply still means high prices, but that doesn’t mean there aren’t options. Mortgage interest rates are low right now because of the pandemic, so higher-valued homes are easier to afford.
Dr. Northaft said the lower mortgage rates have brought in a lot of first-time homebuyers in 2020. He also predicts that next year could be big for real estate.
“I expect we’re going to see a big increase in the availability of homes for sale in the spring of 2021, so that may actually add some downward pressure on those home values,” he said.
Typically, the market does move in cycles, but it’s important to remember two things:
- Right now, we can only predict how the market will move.
- It’s 2020 – anything can happen.