Got PCS orders? If you must move for your military job, you don’t have the luxury of waiting until the market seems just right to sell or buy a home. And Realtor.com says the 2021 real estate market is considered a seller’s market. Prices are high, inventory is low, and multiple offers are possible—even likely. What’s more, interest rates are near record lows according to Freddie Mac. Here’s some insight into this year’s real estate market, to help you navigate selling and/or buying a home this PCS season.
Interest Rates May Help With Affordability
It’s no doubt housing is a top priority for anyone ordered to change military locations. As PCS’ers, you likely have to leave a place called home and find a new one fast. One thing that could work in your favor, whether you’re selling or buying, is today’s nearly-record-low interest rates. According to Freddie Mac, 30-year mortgage interest rates at the beginning of June 2021 were even lower than they were at the same time in 2020.
Low interest rates mean buyers may find the idea of financing a home more palatable if they know they can save a small fortune in interest over time. It may even make a shorter loan term, like 15 years, an option. A lower interest rate can sometimes make higher home prices a bit easier to swallow.
Home Prices Expected To Remain High
Have you checked home prices lately? They’re up. According to the Federal Housing Finance Agency, home prices rose a whopping 10.8% nationally from Q4 2019 to Q4 2020. While expected to keep rising, Realtor.com’s 2021 forecast predicts that home prices will still rise but at a slightly slower pace. That said, prices are expected to increase by 5.7% or more this year.
If you’re a seller hoping to unload your current home before you shuffle off to the next station, high prices are likely music to your ears. But if you’re hoping to buy in your next base town, take comfort knowing that the market is slightly more comfortable for buyers than it was in late 2020.
The Supply and Demand Law Applies To Real Estate
It’s called a seller’s market because, in part, demand is high and inventory is low. As reported in Realtor Magazine in February 2021, it’s not uncommon to see multiple offers on a single listing. Buyers are often willing to offer more than the list price, which can inflate home prices even more. Sellers also won’t be compelled to offer much by way of concessions. Concessions are “throw-ins” like certain seller-paid fees or home furnishings to sweeten the deal. But when multiple bidders are sparring on paper for the same home, the seller is likely going to accept the best offer with the highest price and the fewest contingencies.
Additionally, high demand tends to shorten the time a home sits on the market. In today’s real estate environment, homes are on the NMLS for days, not months. According to Realtor.com, listings that sold in May, 2021 spent an average of 39 days on the market (as opposed to 71 days in 2020).
What does all this mean for service members with PCS orders? If you’re selling, it may not be long before you have a contract. And if you find a home that checks all your boxes in your new town, consider acting quickly. It may not be on the market long.
Are There “Hot” Markets Near Military Bases?
There’s hot, and then there’s hot. Something is happening in the warm-weather states. In the past few years, the U.S. Census Bureau has reported a mass state-to-state migration — people moving out of one state and into another. The states receiving the most “in-migration” are Florida, Texas, and California.
It’s interesting to note that census data also reveals these same states have a high volume of “out-migration.” This means that, when people move out of state, they may be selling a home. And Florida, Texas, and California are not just states with warm climates. They are also home to many military installations. Maybe you have PCS orders to one of these states. If so, you may experience more inventory available in these areas due to state-to-state migration.
Keep in mind, however, that you may also have some competition as these “hot” places are also the destination for many civilians who may also be looking at homes to buy.
What’s the Bottom Line?
If you’re buying, don’t give up! Take time, too, to think about what you do and don’t want in a home and neighborhood before you start the homebuying process. Doing so can allow you to act quickly once you find your perfect spot. It’s also helpful to spread the word that you’re looking. You may not only be able to find leads through friends, you might just find a new home before it hits the market, which could allow you to beat the rush.
