There is quite a bit going on in the world today; things that should be causing a real estate lull; but thank goodness the exact opposite, especially here in the Upstate, is occurring.
Low Mortgage Interest Rates
Historic low interest rates for new homebuyers as well as those interested in refinancing are one of the driving factors in today’s market surge. CoreLogic Executive and Chief Economist, Frank Nothaft said, “The housing industry is the most interest-rate sensitive sector in the economy. When mortgage rates are low, they drive buyer demand and owner refinance, fueling home sales and home purchases and refi originations. We expect home sales in 2021 to be more than in 2020. In fact, we expect home sales relative to the housing stock, a measure of home “turnover”, in 2021 to be above the average annual turnover rate of the prior two decades.”
It seems the ingrained desire for home ownership has been accelerated during the pandemic for many potential homebuyers. Ford Elliott, owner and CEO of the locally owned and operated BlackStream Christie’s International Real Estate commented, “People have this overall idea that the home has never been so important. And with interest rates extremely low historically, I think people have never seen a better time to buy.”
Increasing Home Values and New Construction
Rock bottom interest rates coupled high demand for homes, especially those in the mid-range price market, have created a true seller’s market. Across the board home values have drastically increased in 2020 and when coupled with a strong demand and a lower than normal supply of homes available for sale many potential homebuyers may consider purchasing new construction or designing and building their custom dream home. Executive Vice President of the Greenville Home Builders Association, Michael Dey said, “I think there’s a real strong demand for housing and a very low supply of housing on the market so there’s real interest in new construction as a result. That’s the only way to add supply; a real strong demand for new construction and the demand is so strong right now.”
New home construction is booming all over the Upstate from the rural unincorporated areas to the bustling downtowns. From townhomes, condominiums, mixed used developments, single family home subdivisions and custom homes, new home construction may just be the best way of solving the current shrinking home inventory dilemma.
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