August 2021 Market Update

The start of September means fall is fast approaching and school is officially back in session! So last month we saw everyone taking advantage of the last bits of summer weather - which meant sneaking in those final summer vacations and getting the kids ready to go back to the classroom. This time of year always sees a slight dip in real estate activity but it won’t last for long - once everyone gets back in the swing of things and routines set in, we’ll see things pick back up.

And while the weather might be cooling down, things in the overall real estate market certainly are not. We saw buyers pay an average of 2% over list price for the month of August and while the average home price has slowed to about a 1.5% increase month over month, that’s still a rapid rate of appreciation. If you’d bought this time last year you’d already see an over 15% increase in your value - talk about a great return! And since the cost of seemingly everything has been rising, rent prices have not been immune. We’ve seen rents across the nation go up astronomically with the median rent increasing by 11.4% year to date in 2021 alone. This means that even with the higher home prices we’re seeing, the low-interest rates and loan programs available often make buying a better investment. 

Millennials and the growing housing demand

We’re now seeing more and more Millennials entering the housing market, which is said to be the biggest generational group since Boomers and a lot of these buyers have the ability to purchase with cash that their families can give or lend to them. So some of the buyers with more limited budgets, or first-time buyers looking to get financing for their purchase, are having a bit of a tougher time winning out in these situations. The National Association of Realtors reported that first-time homebuyers only made up about 31% of purchases compared with 35% at the same time the year prior, and that’s largely due to increased home prices and the steep competition in the market.

Low supply, high demand - what are buyers to do?!

We all know low supply plus high demand creates rising prices and fuels competition. And you’re probably sick of hearing it by now but it just means that buying a home will continue to be a bit tougher for the foreseeable future. It’s certainly not a reason to steer yourself away from it, it’s just that you need to go into it prepared and mentally ready to tackle the emotional rollercoaster that is losing out on the home you love, and ensure you have qualified people by your side to help you successfully navigate this trying market. 

Jobs, jobs and more jobs!

Maybe it’s just us but it seems like everywhere you look, there are now hiring signs and a serious lack of employees - entire industries are hanging in the balance because they can’t find enough help and then are having to limit hours or close for entire weeks in some cases. This could severely impact the earnings and livelihoods of many people and thus have a rippling effect on the housing market. Like many people did with their homes when the pandemic first hit, people are starting to look around and ask themselves - do I really like this job? Is this really the career for me? And if anything, this entire last year and a half has taught us that making a change is more feasible than it’s probably ever been. And now that the world had started to open back up over the last few months, we also started to see many employers decide that they wanted to move towards employees coming back into the office. This creates a bit of a conundrum for people who had moved to a new state in hopes that they would be able to continue working remotely. We saw a huge influx of out of staters move into Vermont so it will be very interesting as the workforce continues to return to its “new normal” to see what kind of effects this has on the housing supply and market overall. 

And finally, since we talked a lot about buyers it’s only fair to circle back around to sellers. I am sure we don’t have to tell you, but if you’re thinking of selling, you’re most likely in a great spot. However to really maximize your gains and get the high price you’re really hoping for, your home should be as move in ready as you can get it. The more you can take away any of the objections or concerns that buyers may have, the more likely you are to leverage multiple offers to your advantage. We know though that it can be hard to know what renovations or repairs you need to do versus which ones you could skip out on - something we’re really good at deciphering, so feel free to reach out and we can help you with that as well as connect you with many of our home improvement resources (because let’s be serious, finding good and available help is really the most challenging part right now!). 

--

For more insights into the market or if you want to learn more about what we do at Templeton Real Estate Group, reach out or call 802.488.3487.