On June 5th we shared that inventory across the nation was increasing, but increasing slowly; and prices in the Bay Area and Boston were NOT falling. Has that changed? What’s going on this week? Read on!
- Inventory is increasing, but not enough to keep up with the home buyer demand, especially in popular suburban neighborhoods with easy access to the city
- Buyers are starting to migrate more to the suburbs, in search of more room and outdoor space, too
- Mortgage rates are lower than ever
- Renting is not necessarily a better investment than buying right now
Inventory is increasing, just not fast enough
As we reported on June 5th, inventory is continuing to increase… just not fast enough for the demand. At Torii we’re seeing home buyers frequently ending up in bidding wars or having to waive certain contingencies in order to have their offer accepted. (This isn’t specific to our home buyers, either.) It’s not happening on every property, but we’re seeing it in the most popular price ranges, and mostly in the neighborhoods you would expect.
As more and more sellers realize the prices they could get for their homes right now, we may see inventory increase even further and demand level off, but it’s not likely. Our Torii agents predict that home buyer demand will continue to be high throughout the summer months, maybe even into the middle of the fall, and prices may continue to rise as sellers realize the value of their properties.
If you’re thinking about selling, contact us for a free market analysis on your property. We are offering a listing package including a 3D virtual tour, professional photography, exclusive marketing to our active home buyers, and more.
Buyers are migrating to the suburbs
With Stay-at-Home orders keeping everyone home for months, buyers are looking to migrate out of the city and into the suburbs in search of more room and outdoor space. Many companies are also allowing remote work in the short term or longer term, causing some buyers to consider living outside of what previously would have been a commutable zone. Of the nation’s largest 100 metropolitan areas, 54% are seeing more interest in the suburbs compared to last year.
Mortgage rates are low – and going lower
According to Fannie Mae, the lowest mortgage rate we saw this year will continue to decrease to a new record, beating 2016’s lowest mortgage rate of 3.65%. Home owners will probably continue to look into refinancing mortgages, keeping lenders busy as we move through 2020.
Q: Should I rent vs. buy right now?
We’ve answered the age-old question “Should I rent or buy?” before, but related to the current market conditions, here’s our advice… In the past few months, rent rates have increased 30% or more in the Boston area and Bay Area. Nationally, rents are rising in 65% of counties. Where are rent prices decreasing? Rural Maine, parts of Texas, and in middle America. An analysis by Realtor.com shows that it’s actually cheaper to buy vs. rent in 40% of counties in the US.
Another important factor is the mortgage interest rate. Obviously, affordability is relative to your own personal income & savings situation. BUT if you are in a position to choose renting vs. buying, you’ll want to check the daily interest rates for a 30-year mortgage, which recently have been low… and lower… and lower.
Let’s address some common concerns we’re hearing right now:
“But houses are so expensive right now!”
Yes and no. In both Boston and San Francisco, listings are actually priced just about 1% higher than they were last year at this time.
“Houses are selling too fast for me to find one I like in my price range.”
The interesting thing is that last year, houses were selling FASTER (on average) than they are this month, based on days on market. (Last year houses sold 13 days faster on average, nationally.) There are definitely certain price points where houses sell faster than others. As you can imagine, the more attainable price points are where houses sell the fastest (think $500k in the suburbs of Boston or $1.1m in the Bay Area ‘burbs).
Have a specific question about your neighborhood? Let us know – we’re here to help!