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Housing crisis coming soon? Housing market on fire, causing buyers to overpay by tens of thousands

Expect higher prices and fewer homes on the market this winter.

That’s the takeaway from realtors across the U.S. as the housing boom continues. In some cases, houses that would have previously received a couple offers are getting a dozen or more.

Chip Hodgkins from Hunt Real Estate says it’s all about supply and demand. “When buyers came into the market, they didn’t have an increase of supply so the prices just went up. We’re having 7, 10, 14, we had 53 offers on one house,” he said. Until recently that was something that only happened in major metros or other parts of the country where housing was already in short supply.

Now it’s happening everywhere and that has fair housing advocates worried about the future.

How fast did houses sell in 2021?

Overbidding has resulted in houses only lasting on the market for a few days. Typically, there are only a few cash offers a year in quieter, rural markets. Now, there are a few cash offers every week.

It’s a sellers market, but only if the person has locked down housing in an inexpensive area.

Overbidding sped up the selling process, but it also drove up the median sale price. A normal year sees 1-2 percent increase in home prices. This year, it increased nearly 15 percent.

How much faster is that than average?

The pace at which houses sold in the U.S. this year hasn’t been seen since the 1990s. According to the National Association of Realtors, research shows that 35% of those who listed their homes for sale got paid more than asking.

Comparing the sale to purchase price for those who sold while the market was red hot showed sellers made $85,000. If a house was purchased for $100,000 – the numbers say that it sold for $185,000 this year.

Experts agree that houses in most markets have not stayed on the market for more than a few days. In most cases, a week seems to be the average. However, there are always plenty of bids.

What should buyers expect out of the housing market this winter?

Inventory continued to decline in October, which means that aggressive buying patterns can be expected throughout the winter.

There were 636,606 active listings that month this year, which was a 22% decline over 2020 and a 52% decline over 2019.

Advocates say it’s time to reign in the housing market, and put legislation in place to control the rising costs. Mainly due to the ripple effect this is having on rental prices, which also increased 9% over the last year.

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