Chances are you have heard the term, “A Seller’s Market,” in the past year, but do you really know what that means? Well, it truly goes back to basic economics. The principle of supply and demand greatly impacts markets, including real estate. Let’s explore what a seller’s market is and what factors are affecting it.
Supply and Demand
The principle “explains the interaction between the sellers of a resource and the buyers for that resource.” A simple case of supply and demand is creating a seller’s market all over the country, including the Lake Conroe area. Low inventory of rent and single-family homes coupled with an increased need for housing has created a great climate for sellers. Since there are fewer homes available, people are willing to pay more for the homes on the market. Boiled down to the most simple terms, it is a great time to sell.
There are many factors responsible for the current real estate market. COVID is a major one that has been a catalyst for other factors.
COVID-19 Feeding Frenzy
The pandemic response by our government officials and the subsequent shutdown of all “non-essential” work greatly impacted our economy. Working and schooling at home via Zoom became the norm for most families. And they began leaving the cities where they no longer had to live for more rural settings. People longed for space and areas where they could be socially distant. Areas like the Lake Conroe area found themselves in high demand. Good schools, low crime, national & state forests, Lake Conroe, etc appealed to potential residents. During the height of the pandemic, articles were written quoting Mike Goins as he described the market as a “feeding frenzy.”
Some states had more stringent restrictions than others. California for example was more closed than Texas. This has caused people to move out of the more restrictive states. Again the Lake Conroe area, specifically Conroe, Texas, is a highly-sought-after place to live. In fact, according to the US Census, Conroe is one of the fastest-growing cities in the United States.
COVID-19 Housing Decrease
The shutdown did not just close stores, schools, and churches. The shutdown closed entire sectors of industry. For example, lumber mills shut down. Homebuilders stopped building new houses. Now as industries are opening up, lumber prices are just now starting to plummet from historic highs. To read more on lumber prices, click here. The incredibly high prices for lumber have made builders press pause on their housing projects. The shutdown effectively halted the real estate market’s ability to grow its inventory. This is key to the supply and demand principle.
As you can see COVID-19 played a huge role in our current real estate market. It helped cause the low inventory of available houses, including ones to rent. It also caused some areas like Lake Conroe to be a highly desired place to live, which significantly raised the demand.
If you have a house that you would like to sell, then now is the time. People will give very competitive offers for good properties. In fact, Mike Goins might have a buyer right now for your home. Make sure you take advantage of this competitive seller’s market. On the other hand if you are looking to buy, he not only has listings, but can help you find a property.
Dave Ramsey believes that if you need to sell, then you need to buy now. Don’t wait thinking that prices will fall in the near future. To hear more of what he has to say, read my article, “Are We in a Housing Bubble?” At Mike Goins Real Estate, we want to help you find the right property, but also want to help you understand the current real estate market. Therefore, I wanted the term, “Seller’s Market,” defined.