The spring 2021 real estate market is like no other. There are many factors that contribute to why the market is as it is today. It's important for VA home loan buyers to be educated about the current market, so they have the information and ammunition needed when looking to buy a home.
The Covid-19 Pandemic
In the fall and winter of the 2019-2020 real estate market, interest rates were low and buyers were scooping up homes. The inventory of homes available for sale, or supply, was just starting to fall and not be able to keep up with the demand. Then, the Covid-19 pandemic arrived. It halted the real estate market in its tracks for a short while. As the market started up again, during the summer of 2020, many sellers decided to hold off on selling. However, buyers were coming out of the cracks. This brought the inventory of available homes for sale even lower. Fast forward to December 2020, the inventory was at its lowest since 1999. Currently, more homes have been listed for sale, as they do every spring. However, there are still so many buyers which makes the competition fierce.
Low Interest Rates
The interest rates are still historically low. This is bringing out investors because money is so cheap to borrow. It is bringing out first-time home buyers because they can now afford a home. It is also bringing out move-up buyers who can afford a larger home.
Since the inventory of homes for sale is still so low and there is an abundance of buyers, it's very competitive. When a house comes on the market, buyers flock to see it. Usually, multiple buyers make offers. Sellers typically have multiple offers to choose from. This means buyers are trying to make their offers better than the other offers. Many buyers are offering list prices and higher. Sellers want to see financially strong buyers. Many sellers are choosing buyers who are able to put 20% down with conventional loans. It's important to show sellers that buyers with VA home loans are strong buyers, just the same. Buyers are letting sellers choose the closing dates. Buyers are waiving contingencies.
Since the demand is so high and the supply is so low, home prices are rising. From this time last year, home prices have risen 10% year-over-year.
If you are using a VA home loan to buy a home, you'll want to find one of the best VA home loan lenders. You'll also want to find a real estate broker who specializes in buyers with VA home loans. Your broker and lender will help you write an offer that is attractive to sellers in today's market.