Even if you’re not in the market to buy or sell a home, you’ve probably heard about the incredible housing frenzy that has hit the national real estate market, and Smith Mountain Lake is no exception. Homes are flying off of the MLS in record time (sometimes hours!) and owners are getting top dollar (and more!) for their investments.
This is great news if you’re selling your home. High demand and low inventory create a seller’s market. But if you are looking for a home, you might not be so lucky. Sellers are receiving a mountain of offers with prices well above the initial asking price. If you’re not prepared to act fast and offer more, the chances of snagging a dream home are not in your favor.
Are We Headed for a Housing Crisis?
There’s also the underlying concern of housing crash reminiscent of the mid-2000s. As we see housing prices hit record highs, we can’t help but ask ourselves how long this trend will last, and what’s on the other side?
According to Realtor.com, the national median home price went up 17.2% year over year in April, landing at a new record high of $375,000. However, incomes did not increase at the same rate. This begs the question, “How can this market sustain itself?”
Experts believe that a crash similar to 2008 is not in the forecast due partly to the factors that caused that crash in the first place. The Great Recession was caused mostly by bad mortgages, which have largely disappeared from the market thanks in part to regulations. This means that even though buyers are paying over asking price, they’ve been vetted to ensure that they can afford their mortgages. There are also forbearance programs in place to aid those who have hit financial hardship due to Covid-19, which has helped keep a lot of homes from going into foreclosure.
But the current state of the real estate market can’t sustain itself, either. Experts believe that instead of seeing a pendulum swing in the opposite direction where prices crash, we’re going to see prices stabilize and demand taper off. As the pandemic tapers off and more people return to work, we will see less of a demand for the perfect “work from home” setting to a demand for homes closer to the buyer’s workplace.
What Does This Mean for Smith Mountain Lake Real Estate?
If you’re considering putting your home on the market, now is the time. But be ready to move once your home sells because homes in our area are selling fast. And if you’re in the market to buy, be prepared and be patient.