The previous 12 months have been a roller coaster, which is evident when we consider the imbalance between supply and demand. Basic economic principles tell us that when demand is higher than supply, values increase. So why didn’t homeowners take advantage of last year’s rising home values and sell? 3 reasons: Financial Insecurity, Life Insecurity, and Health Concerns.
The economic and social disruptions caused by the pandemic ushered in a sense of uncertainty amongst the millions of individuals and industries facing an existential threat to their health and their livelihoods. The result was a conservative approach to discretionary activity directly affecting supply in the real estate market.
Unemployment rates spiked, lockdowns limited the ability of many to produce an income, and major health concerns were all contributing factors to decreased seller activity. However, expanding vaccine distributions, improving health conditions, and economic stimulus in place, experts predict an increase in seller activity as we move throughout 2021.