Why are home prices so high?

Have you noticed that prices for homes in your neighborhood are going up? In awe of how much homeowners are getting for their homes?

Well the reason why people are getting more money than their home is worth is because of Covid-19. A lot of people, including me, thought that the market was going to drop and everything would slow down a lot because of this virus but the exact opposite happened. It boosted the price of homes, shortened the amount of time a home is typically on the market and brought a whole lot of competition.

Here's how it happened.

Covid-19 caused state wide quarantine's, curfews and a whole lot of panic. People were getting sick, some got better but there were others who didn't and lost their lives. This concerned a lot of sellers because a number of buyers would enter their home throughout the day which was very risky. So sellers did what was best for them and their family, they took their homes off the market so they can minimize the risk and stay safe. Buyers also decided to take a break looking since they wanted to protect themselves as well.

Now when everyone started going back out and the quarantine was lifted, everyone wanted a house but the sellers weren't and still aren't as comfortable. Summer is the busiest time for Real Estate and now there's spillover because of all the people who wanted to purchase homes during the quarantine. So there's twice as many buyers with hardly any homes for sale and this has caused a lot of competition.

If someone decides to sell and put their home on the market then everyone goes after it. I personally tried to go see a home with my clients on the same day a property was listed for sale and there were already 17 other appointments to see it that day and a full schedule the next day. Now because of all this competition and the fact that buyer's see all the competition, there are a whole lot of offers and everyone is trying to make the best offer so they can get the house.

Buyer's are offering way more than the house is worth so they can have a home to live in. My co-worker listed a home for sale and three-to-four days he had about 16 offers and the highest almost being $100,000 over what he had listed the home for. When that house sells and and completes the transaction, it will help raise the prices of some other homes which people might offer even more again since there are not a lot of houses that are on the market.

So that's why the prices are very at the moment and still seem to be going up. If you want to sell then now is a great time to do it and if you want to buy, then make sure you are ready for some competition and put your best foot forward.