Spring is in the air, and many of us are eager for warmer weather, blooming flowers, and birdsong. Traditionally a strong season for home sales, this spring may be an especially promising time to list your property. The U.S. residential real estate market is experiencing its most significant surge since 2006, but experts emphasize that today’s conditions differ greatly from that earlier boom.
Is it the right time to list your home for sale?
If you are a senior considering a move to a life plan community (also known as a continuing care retirement community, or CCRC) or another form of senior living, current market dynamics make now a potentially ideal moment to sell. Several converging factors have created a seller’s market. Below are the key drivers shaping today’s housing landscape.
>> Related: CCRC Move Prep: Tips for Selling Your Home Faster & for More Money
High demand, low supply
Despite the challenges of the pandemic, sales of previously owned homes rose sharply, reaching levels not seen in over a decade. A primary factor behind the current boom is a shortage of available homes for sale, which has pushed prices higher. For the first time, the median home purchase price exceeded $300,000, and U.S. home sale prices rose more than 10 percent year over year in late 2020—the largest annual increase in decades.
A slowdown in new construction
New home construction has struggled to keep pace with demand due to limited land availability, shortages of skilled labor, and rising materials costs. Lumber prices, for example, climbed dramatically over the past year, contributing to an increase in construction costs. Although housing starts increased in 2020, overall levels remained well below historical averages, and higher building costs are adding thousands of dollars to the price of a new single-family home.
Low interest rates
Mortgage rates remain very low despite small recent upticks, and the Federal Reserve’s policy stance suggests rates will stay favorable until employment and inflation objectives are firmly met. Low mortgage rates keep borrowing affordable and encourage more buyers to enter the market, sustaining demand and supporting higher sale prices.
Nesting Millennials
Millennials—those born roughly between 1981 and 1996—are now the largest adult generation and are entering prime homebuying years. As many in this group seek to purchase their first homes, competition for a limited supply of properties intensifies, contributing to rising prices and quicker sales.
>> Related: Pandemic Real Estate: Is It a Good Time to Sell Your Home?
Pandemic-driven relocations
The pandemic prompted some city residents to look for more space in suburban and rural areas, especially as remote work became more common. This shift increased demand for homes with room for home offices, yards, and comfortable living areas, further tightening inventory in many markets.
How seniors can take advantage of this sellers’ market
For seniors considering a move to a CCRC or another senior living option, current market conditions can make selling your home both faster and more profitable. The combination of high buyer demand, limited supply, low interest rates, and demographic pressure from younger buyers has created a favorable environment for sellers.
To illustrate the market’s momentum: in mid-2020 home sales saw record monthly increases, and while patterns vary by region, many markets remain strongly tilted toward sellers as spring arrives. That scarcity of listings tends to translate into higher offers and shorter times on market.
>> Related: 4 Ways to Know You’re Ready to Consider a CCRC Move
Home equity is another important consideration for seniors. With home prices rising, many long-time homeowners saw substantial equity gains. In 2020, homeowners collectively increased their equity by significant amounts, and continued price appreciation into 2021 may further enhance the financial benefits of selling.
If selling is on your horizon, connect with an experienced real estate agent who understands your local market. A knowledgeable realtor can provide a realistic assessment of your home’s value, guide you on timing and pricing strategies, and help you plan a smooth transition into the next chapter of life.