March 1, 2021
Will it Be March Madness All Over Again?
When we hear “March Madness,” we naturally think of college basketball. But late March is also the traditional kickoff of the spring real estate market.
When temperatures rise, the days grow longer, and it gets closer to the end of the school year, more homes usually come on the market. Why? Properties tend to look nicer when everything is blooming, and sellers are looking to appeal to those families who want to time their move to coincide with the end of the school year.
The big question is: will there BE a Spring Market in 2021? Every market, whether you are selling houses or widgets, is based on SUPPLY and DEMAND. Will the supply of homes increase with the warm weather, as in years past? Is there a reason for sellers to wait for the warm weather and the end of the scholastic year? And what’s on the minds of buyers right now?
Let’s talk about demand. A buyer’s first priority these days is finding the right house and then winning the bidding war to have their offer accepted. The market has shifted so much that timing a move for the end of the school year is nearly impossible. And with so many schools operating remotely, timing is just not that important a consideration anymore. Motivated buyers realize this and are already hunting for homes. I don’t think anyone who is seriously looking and understands the current market is sitting on the sidelines. So, from a timing standpoint, I don’t expect demand to increase.
However, interest rates have just taken a jump up as of the end of February. Yes, they are still low, but a .5% increase is significant for those buyers at Bergen County entry-level – that is, south of $500,000. This rate increase will put home ownership out of reach for some, and if rates continue to rise it will spell trouble for others. Buyers with low down payments and tight budgets are keenly aware of this.
Will this lead to an increase in demand? Will this compel sellers to get a move on, and put their homes on the market ASAP instead of waiting until spring has sprung?
Only time will tell.
