BRIAN BUFFINI’S
REAL ESTATE REPORT US EDITION 2nd BIANNUAL 2021
The current real estate market is historic. Low interest rates are fueling high demand, but a shortage of inventory has complicated the buyer’s journey. Throw a global pandemic into the mix, and we are looking at a real estate market nobody has witnessed before. Today’s buyers and sellers face unique challenges, and it’s up to trusted real estate professionals to guide them through these conditions. To help with this mission, we produce Brian Buffini’s Real Estate Report twice a year. Remind your clients they’re in good hands and help them know what to expect by using this guide on the national real estate market to share relevant and upto-date information with them.
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Brian Buffini’s Real Estate Report
US EDITION
Table of Contents State of the Market
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Regional Market Snapshot
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This is Not a Bubble
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Mortgage Stats
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What To Expect for Buyers
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What To Expect for Sellers
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Homeownership: The Best Investment A System to Succeed in Any Market
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State of the Market The pandemic did not halt home sales, but as restrictions begin to loosen, buyers are returning in full force. Increased demand has inventory extremely tight, but home builders are starting to pick up the slack.
Housing Inventory is Low April 2020
4 months Supply April 2021
2.4 months Supply (A near-record low)
Existing Home Sales:
5.85 million + 20%
New Home Construction on the Rise New Homes Make Up:
26% of inventory Housing Starts May 2021:
1.59 million +15% year-over-year
year-over-year Median Sales Price:
$341,600 +19.1%
year-over-year
SOURCES: National Association of Home Builders, National Association of REALTORS®, Redfin
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Brian Buffini’s Real Estate Report
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Regional Market Snapshot While national trends also hit close to home, at the end of the day, real estate is local. Here’s a look at the post-pandemic rebound in each region.
Midwest Median Price:
Median Price:
$259,300 +13.5%
$381,100 + 22%
year-over-year
West
Northeast
year-over-year
South
Median Price:
Median Price:
$501,200 +19.9%
$289,600 +15.8%
year-over-year
year-over-year SOURCE: National Association of REALTORS®
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Brian Buffini’s Real Estate Report
US EDITION
This Is Not a Bubble The housing market is hot but leading economists say a crash is not imminent.
Causes of the Last Housing Bubble (2007-2008) Low down payments Flexible mortgage rates Oversupply
Why 2021 is Different: The current combination of low inventory and high buyer demand means the risk of overbuilding is minimal. Existing Homes For Sale 2021:
Existing Homes For Sale July 2007:
1.16 million*
4 million
*As of April 2021
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Brian Buffini’s Real Estate Report
Down Payments Are Up More money down means more equity at the start. Leading up to the market crash in 2008, down payments were low. Typical Down Payment in 2021:
Down Payment in 2007:
15.9%
9%
In 2007, 45% of firsttime buyers financed 100% of their home compared to only 17% in 2020.
More Fixed-Rate Mortgages Before the 2008 market crash, more buyers gambled with adjustable-rate and fixed-then adjustable-rate mortgages. Buyers With Adjustable-Rate and Fixed-Then AdjustableRate Mortgages:
2020:
2007:
4% 15%
Lending Restrictions Are Tight It’s harder to qualify for a mortgage you can’t afford. Foreclosure filings were at a 15-year low in February 2020 before pandemic forbearance. Foreclosure Filings: March 2008:
February 2020:
April 2021:
234,685
48,004
11,810
SOURCES: Redfin, National Association of REALTORS®, Attom Data Solutions
US EDITION
Mortgage Stats While mortgage rates are expected to increase slightly, they are still hovering at historic lows, making homeownership more accessible for many new buyers.
Live in the Payment, Not the Price For a home that costs $329,100 a 1% decrease in the mortgage rate takes $165 off the monthly payment.
Example: 30-Year Fixed Rate Mortgage Home Price: $329,100 • Down payment: 10% • Mortgage rate at time of purchase (2008): 6%
Current Average Mortgage Rate:
3%
Monthly Mortgage Savings When Refinancing at Current Rate:
$525
SOURCES: Freddie Mac, National Association of REALTORS®
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Brian Buffini’s Real Estate Report
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What To Expect for Buyers In this competitive marketplace, buyers will need to be flexible in order to secure their dream home. When a buyer knows what to expect, they are set up for a smooth, successful process.
The Buying Process is Taking Longer 2021:
2020:
Homes Toured:
Homes Toured:
96 Days 91 Days 14 13 Top Three Buyer Concessions Buyers are making changes to sweeten the deal. Higher Down Payments About $9,000 more per buyer
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Paying Above Asking Price 34.4% of buyers are paying over asking, up from 21.2% in 2020
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Waiving Contingencies like inspection and finance
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Cash buyers, rising home prices and a fastpaced market are challenging new buyers.
SOURCES: National Association of REALTORS®, Redfin
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Brian Buffini’s Real Estate Report
US EDITION
What To Expect for Sellers This is a strong seller’s market in all regions. When the home price is right, the process will be quick, so sellers should be prepared.
Anticipate Multiple Offers Average number of offers a home received in 2021:
5
Average number of offers a home received in 2020:
42% of homes sold above asking price
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Homes Sell Quickly Average time on the market in 2021:
17 Days
Average time on the market in 2020:
27 Days
2 SOURCES: National Association of REALTORS®, Realtor.com, Redfin
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Brian Buffini’s Real Estate Report
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Homeownership: The Best Investment The uncertainty of 2020 demonstrated the tremendous value of homeownership — and the value was reflected in dramatic equity gains.
per month
In most markets, owning a home costs the same — or less than — renting.
Total National Homeowner Equity Increase in 2020:
$1.5 trillion
Homeowners equity increase by
Home prices in 2021:
16.2%
11.3%
year-over-year
SOURCES: National Association of REALTORS®, CoreLogic Homeowner Equity Report
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Brian Buffini’s Real Estate Report
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Typical rent: $1,200
Property values often continue to grow, even when stock prices do not.
Nearly 70% of metro areas have a median home price of less than
$320,000
which is close to the national median home price.
A System to Succeed in Any Market More than 80% of all transactions are conducted through a sphere of influence — there is an existing relationship that leads to sales. Buffini & Company members achieve this by Working by Referral. Work by Referral Generating a stream of high-quality leads through building relationships.
“There is no lead more powerful than one referred from someone you know — someone who knows you, trusts you and will put their name to you.” — BRIAN BUFFINI
When you master Working by Referral, you can
91% of buyers & 89% of sellers would use their agent again or refer them to others
succeed in any market — and Buffini & Company is here to help! Talk to a Membership Consultant to learn how Buffini & Company business solutions can take your business to the next level:
1-800-945-3485 x2. SOURCE: 2020 NAR Profile of Home Buyers and Sellers
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Brian Buffini’s Real Estate Report
US EDITION