Things have changed…
What do these charts mean for you:
Mortgage rates rose significantly, slightly over 50 basis points, since January 2021. This increase in mortgage rates equates to about a 6.5% rise in the monthly 30-year fixed mortgage cost. Usually, this would hamper demand—which it will—but supply is so low that I don’t feel it will matter much from the seller’s point of view.
Although we don’t expect the same level of buying in 2021 that we saw in 2020, the environment is right for demand to outpace supply in 2021. In the short term, we may even see a demand spike as potential buyers try to purchase before rates rise higher. As a result, I anticipate a competitive landscape for buyers over the course of this year.
While the market remains competitive for buyers, the market is making it an exceptional time for homeowners to sell. Low inventory usually means multiple offers and fewer concessions. By January 2021, inventory declined to lower levels than January 2020, then ticked up slightly in February before going lower still in March 2021. As you can see from the chart, sales outpaced new listings in March. With such a consistently high level of demand, I believe prices will likely continue to appreciate throughout 2021.
The number of condos on the market fell in March, but remains higher than last year. The steep decline in condo inventory seems to have come to an end. Demand for condos has come back strong, and sales outpaced new listings in March. Over 100 more condos sold in March 2021 than either March 2019 or March 2020.
I anticipate more new listings to come to market, which is typical as we enter into the spring/summer season. Demand will likely remain high and new supply will be absorbed quickly.