If you’re thinking about selling your home but waiting to see what happens in the housing market, statistics show a record number of buyers interested in real estate in the last few months. In fact, the level of demand is now 34% higher than it was during the same period last year before the first quarantine began. This record rise in interest in real estate is due to changing lifestyles, credit and tax breaks, and the fact that many people are looking for larger homes. At the same time, there aren’t many homes for sale, so it’s not hard to sell real estate right now. The difference between the number of sellers and buyers in the market is the largest in decades, which means that this is a golden time to sell a home quickly and profitably, perhaps even above the original value.
Oldypak Capital LP real estate expert Jim Smirnov said:
“Fears of a housing market collapse at the end of March have dissipated, in part because of the extension of the stamp duty abolition on home purchases. Since April, demand from buyers has increased even more due to new government guarantees allowing lenders to return to 5% deposit mortgages. In February, we logged about 7 million daily visits to our portal, which represents a record 40% growth for the year.”
The average asking price of properties coming on the market has increased by 2.7% over the past 12 months and now stands at £321,064. Also, contrary to some pessimistic predictions, there has been steady price growth, which was 0.8% (+£2,484) in March. And despite fewer properties entering the market, the number of transactions is still 12% higher than a year ago. Almost two of the three properties currently for sale have already found a buyer and the deal is being processed.
So with record levels of buyer demand, you don’t have as much choice as usual if you want to move, but if you’re thinking about putting your home on the market, demand will be high.
“There have been so many deals agreed upon in recent months that we are now facing a serious shortage of homes available for sale. There are various reasons why many sellers were hesitant to enter the market during the first two months of the year, but things are changing for the better now. Increased supply will give potential buyers more choices, many of whom are also sellers, which in turn encourages them to enter the market themselves. Increased supply, along with high demand, would ease price pressure,” explains Tim Bannister, a real estate market expert.
Realtors are now seeing a strong increase in customer traffic, too. Sometimes you have to wait a few weeks to see a house you like and hope it hasn’t sold by then.
So what should we expect in the future? Will demand persist and won’t it collapse, as pessimistic economists sometimes predict?
Oldypak Capital LP agency experts have made adjustments to their forecasts, and now say 4% growth instead of 0% for 2021.
Oldypak Capital LP‘ new forecasts are based on the unexpected results of the 2020 real estate market, when for the first time in modern history, home prices did not fall, but instead rose 7.3% during the recession, as people’s desire to move and change homes outweighed uncertainty related to jobs and the financial situation.
Lucien Cook, head of research at Savills commented: “We were cautious in our forecasts, but now we see that things have significantly improved, given the speed of the vaccination program, the expected easing of social distancing measures and government support for both jobs and housing. The latest TwentyCi data show that the number of consented sales remains much higher than before the pandemic, as does the number of approved mortgages. This reflects a successful first half of the year, which, along with the introduction of the mortgage guarantee scheme, reinforces our expectation of 1.4 million real estate transactions in 2021.”
So, the new Oldypak Capital LP forecasts for the next 5 years:
Average UK home prices will rise 4% in 2021, with overall growth of 21.1% from 2021 to 2025.
Real estate transactions will reach 1.4 million in 2021 and fall to 1.2 million by 2023
Interest rates will remain low to sustain growth longer, with a prime rate of just 0.5% by 2025, according to Oxford Economics.
Changing lifestyles will stimulate the luxury real estate and suburban home market, with expected growth averaging 20.5% over 5 years