Updated: Jul 27, 2021
The real estate market has really been growing in recent years, notably throughout the COVID-19 crisis. Home prices skyrocketed, homebuyer demands plummeted, and mortgage interest rates fell to record lows.
Consequently, it has made house building among the few shining moments in a differently dark period. However, the property market is constantly changing, and realtor trends change from time to time.
Add to that the fact that this market is extremely localized, featuring distinct circumstances in each location, condition, and geographic region, and you can't expect things to stay unchanged for long. To cover the current real estate market trends: let's start by looking at some more recent patterns we've noticed in the previous month or two.
Price Listings Are on The Rise
As the pandemic started, the real estate marketplace has been hobbling due to the supply crisis. However, there have been unsteady signs of progress recently.
According to CNBC, new listings increased by 4% year on year in the first week of July. While the overall listing is down 32% over this year, this is an improvement from the 42% drop recorded in June.
The Affordability of Real Estate Property is Diminishing
We've all heard that housing prices have really been skyrocketing in previous months, however until lately, lower monthly mortgage rates and high earnings have been out to keep any significant drops in affordability at bay.
However, such days are faded. Affordable housing is currently lower than historical norms in 61 percent of U.S. states, per ATTOM Data Solutions. This is an increase over the previous quarter's 48% and the largest proportion within two years.
Tossing Rates While Revenues are Declining
The latest research from June reveals a significant drop in both house flipping trends and profitability. As per the 2021 House Prices Flipping Report of ATTOM Data, flipping represented only 2.7 percent of all transactions in the first quarter of the year, the lowest percentage in more than two decades.
Worst of all? Revenues from flipping have also decreased. Per the recent first quarter, the average gross margin for a typical flipping rate was $63,500, representing a 37.8 percent return on investment. This is a decrease from the prior quarter's 41.8 percent and the poorest ROI after 2011.
Tenants and Homeowners Safeguards are Becoming More Comprehensive
The COVID-19 crisis has resulted in a plethora of tenant and homeowner safeguards, namely an eviction restriction, a foreclosure moratorium, and extensive mortgage repayment alternatives. Though several of them were scheduled to terminate in June, agreements were renewed, allowing struggling homeowners, renters, and loan debtors more time to readjust financially.
Obviously, landlords grabbed the raw end of the deal and the renewal of the Center for Disease Control eviction prohibition will continue putting a hardship on those who have nonpaying renters. Thankfully, the White House has said that these extensions will be the last of such ilk. Therefore, it means evictions might be reinstated soon, at least in places where municipal bans do not exist.
Foreclosures are Beginning to Rise Again
Notwithstanding the foreclosure bans, foreclosures seem to have been on the upswing. Foreclosure notices are up 23% over a year ago, says ATTOM Data.
Recently reported foreclosure filings have increased by 36%. Last month, one out of every 12,700 residential buildings got a foreclosure petition. Delaware, Florida, Illinois, Nevada, and New Jersey had the intense peak rates of foreclosure.
Whenever it comes to the actual real estate market, there are indeed a lot of factors involved, making it impossible to anticipate what will happen next.
As a buyer, the greatest thing you could do is be knowledgeable with your current local market, know the risks, and ensure you're on a firm financial ground prior to actually taking the next step.