The real estate world has certainly seen a lot of changes and challenges over the last year, and 2021 is turning out to be an interesting year so far. The demand for homes is outpacing available listings, creating an intense competition for inventory. Today, we’re breaking down a recent report from the National Association of REALTORS® (NAR) on market competition and what that might mean for buyers and sellers.
According to NAR’s report, there was an average of four offers per home sold (closed) in February. In comparison, only a year ago, the average was closer to two or three. This competition has led to double-digit price growth and properties selling in record time. And NAR estimates that in order to get back to a healthy supply level — equivalent to six months of demand — the market would need an additional 2.7 million homes.
With such an intense competition at play, properties are selling faster, too. The median time-on-market in February was 20 days, a record low since the housing market’s recovery in 2021. NAR reported 74% of existing homes sold in February 2021 were on the market for less than 30 days. In Illinois, properties sold from 16 to 30 days.
So what does this mean for buyers and sellers trying to navigate the market? Ultimately, there just aren’t enough homes being sold or being constructed to meet the demand. NAR advises buyers to expect strong market competition, a fast-churning market, and continued home price appreciation of about 7% in 2021. To prepare for such a rapidly-moving market, there’s no better strategy than making sure you have an experienced, trusted REALTORS®by your side to guide you through the process. In such a fast-paced city like Chicago, how you approach the market matters even more.
Photo from 1411 N. State, #1N