We’re all excited that 2021 is finally here—goodbye, 2020! Even though 2020 wasn’t fun for so many reasons, the housing market wasn’t one of them. In fact, the housing market was one of the bright spots in our economy, and that’s going to continue in 2021. Housing is booming in Greater Lafayette!
I’m here to break down exactly what to expect from our local housing market this year, especially if you’re thinking of buying or selling in 2021.
Home Inventory Will Stay Low
Home inventory in Tippecanoe County has been very low for a while. For reference, when we have a balanced market between buyers and sellers, there are usually around a thousand homes on the market in Tippecanoe County. Right now, there are under ONE HUNDRED homes on the market.
If you’re a buyer, this means that it’s challenging to find the right home, and you may have to give a little on some of your needs and wants. Unfortunately, it also means that prices are going up because there is just so little on the market. If you find a home that works for you, you have to be ready to jump on it fast. It’s still a good time to be a buyer (more on that in a minute), but it might take a little bit more patience than it has in the past.
If you’re a seller, on the other hand, it’s a great time to be listing a home! Homes are flying off the market, and selling your home likely won’t take much effort at all, especially in certain price ranges.
Investors are Taking Advantage of the Favorable Market
Population growth and low interest rates are spurring investors to take advantage of properties in our area. Tippecanoe County is an attractive place for outside investors too because it’s a college town with a strong economy. As urban areas have become less popular during the pandemic, affordable Midwestern towns are back in. Investors can drop a reasonable amount of money and get a comfortable return.
These factors mean that inventory in Tippecanoe County is going to stay low for the time being.
Historically Low Interest Rates
We’ve all heard it a million times, but it’s true—interest rates are very attractive right now. This is one big bright spot if you’re a buyer right now. Interest rates really are historically low, and that means that you get more bang for your buck. The increased purchasing power is real, and your savings over the life of a 30-year loan can be pretty significant.
The Fed has indicated that it will keep the federal funds rate low to support the economy as we continue to recover from the effects of the pandemic. This indirectly influences mortgage rates, which means that mortgage interest rates will likely stay low for some time, as well.
That said, low interest rates won’t stick around forever, and some economists think that rates will likely increase some throughout 2021 (though they’ll still be very good, and it all depends on what happens with the pandemic). If you’re interested in buying a home, now is the time!
New Construction is on the Rise
Builder confidence is near record highs right now, and we continue to see new construction increase due to the high demand for homes that I mentioned earlier. Builders are working as quickly as they can, and there are new developments all over Tippecanoe County. The Courtyards at Belle Terra and neighborhoods like Stonehenge Oaks Ridge and Stones Crossing are all expanding.
Building costs have gone up incredibly due to increased lumber costs in 2020, but the high demand has kept builders going, and I don’t see that slowing down anytime soon. According to Redfin, more new homes will be built this year than in any other year since 2006!
Home Prices Will Continue to Go Up
Home prices have grown at a steady clip here in Tippecanoe County, and due to all the demand, it’s unlikely that those increases will stop anytime soon.
If you own a home, it’s probably appreciated nicely in the past few years. Higher equity combined with great interest rates might mean that it’s time to think about a refinance! A refinance can help you with all different kinds of financial goals, so it’s worth talking to a lender. If you need recommendations for a lender, just let me know.
If you’d like help navigating this crazy market in 2021, that’s why we’re here! We’re experts in the Greater Lafayette market, and we will do everything we can to help you reach your real estate goals this year, whether that’s buying, selling, or both. Just reach out at (765) 543-5947, and let’s get started.