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The Housing Market Gets Heated: Low Inventory Continues Into Summer 2021

The demand for houses is increasing in major cities across the United States.

By Pam JannesPublished 3 years ago 3 min read
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The seller’s market continues into summer 2021. Growing housing demand, as a result of low pandemic interest rates, remote work, and low inventory, continues to be the driving force behind soaring home prices in 2021. Fierce competition among buyers in search of suburban havens and larger square footage has driven housing prices to an all-time high, where buyers are paying over $100,000 over the asking price in certain zip codes and forgoing home inspections in order to score their dream home.

Austin, TX, a hub for remote tech workers moving away from Silicon Valley, saw 72 homes sell for as much as $300,000 over asking so far in 2021, while homebuyers in Denver have resorted to bribery and perks for listing agents in order to win a nail-biting, bidding war. Across the U.S., people are describing the current house-hunting experience as anxiety-ridden.

So, when can buyers find some relief from this cut-throat market? Redfin predicts a housing market cool-down this summer, as vaccine distribution continues and investment in other activities like travel and entertainment pick back up. Seattle Redfin real estate agent, Alysan Long, reports that “homes are staying on the market past the date the sellers had planned to review offers and other homes are being listed without an offer review date, neither of which was happening earlier this spring.” Still, we’re not out of the woods just yet. Pending home sales are still currently up by 29% compared to 2020.

In terms of where buyers may find relief, the answer may be certain regions on the East Coast and in the Midwest. This study by DeedClaim, an online deed preparation service, found the best cities for single female homebuyers, specifically, based on factors like annual income, median home value, homeowners insurance rates, and property taxes across 50 cities. Pittsburgh, Philadelphia, Richmond, and Cincinnati top the list.

According to the study, “The markedly high score stems from Pittsburgh’s high number of female-owned homes and a surprisingly low median home price of $138,000. This means that women in Pittsburgh can enter a buyer’s market with lower home costs and a city full of single lady homeowners to seek advice from.”

In Pittsburgh, the median annual income for women is relatively low ($45.4K), but then again so are the home prices. The median home value sits at $125,000, which means, on average, women in Pittsburgh are spending a lower percentage of their monthly income on mortgage payments.

Forbes also looked at 100 U.S. metros to determine the most affordable cities for homebuyers or “undervalued markets” according to George Ratiu, senior economist with Realtor.com. Midwestern cities like Detroit, Cleveland, and Toledo lead the pack in terms of housing affordability.

According to Forbes, "Although Detroit has suffered major blows over the years—a failing car industry, racism-fueled out-migration to the suburbs and blighted neighborhoods caused by the Great Recession—Detroit has been on the upswing for the last few years." Major tech companies have also joined companies like General Motors, Ally Financial and Quicken Loans in a Detroit headquarter.

Our hometown Baltimore, MD earned the 5th spot, with the median salary of $50,108 and the median home listing price at $191,000. Forbes said the reason behind this is that Baltimore is home to high-profile employers, including John Hopkins University and Northrop Grumman, one of the world’s largest weapons manufacturers and military technology providers.

The cause of this? Low interest rates, combined with a housing inventory shortage, have caused demand for real estate to soar.

But real estate agents have expressed concern over the booming Baltimore housing market, claiming that the demand will skyrocket property prices. And they have good reason to be concerned—Town houses, typically cheaper than detached homes, have reached a median sales price of $250,000 — an 11% increase since last year, according to Bright MLS.

The Baltimore market is on track to continue its soar late into this year.

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