The State of the Real Estate Market - H1 2021

Key Findings & Buyer and Seller Motivations

The COVID-19 pandemic has both disrupted the real estate market and accelerated progress. With stay-at-home orders, new safety regulations, and fear of exposure, real estate agents have found themselves struggling against incredible market forces, low inventory, and legacy practices.  

In February 2021, vipHomeLink, the leading home management app for homeowners, surveyed 390 real estate agents from across the United States and asked for their views on the competitive and challenging nature of the current real estate market. 

In this three-part series, we’ll present the survey’s findings along with vipHomeLink’s assessment of the main drivers and key actions real estate organizations may consider to build resilience in their business, strengthen their position in the market, and achieve growth during these uncertain times. 

Key Findings

A consensus across the real estate spectrum found a strong seller's market (87%), fueled by low inventory and resulting in higher-than-average prices. More than 80% of survey respondents believe the market will stay strong for sellers through the first half of 2021. 

Despite “low inventory” being a top issue for realtors and buyers, almost half of realtors (45%) believe there will be “moderate volume increases,” with 19% believing there will be “strong volume increases.” Survey respondents also expect prices to continue to rise with more than 90% believing in strong or moderate price increases through July 2021. 

Buyer motivations in the current market

Main drivers for current home buyers:

• Price – Price remains a main driver for many home buyers. More than 93% of respondents reported price as the most important aspect for current buyers, with more than half citing “a “strong interest” among their clients.
• Completeness – Buyers want a finished product, not a fixer-upper. More than 90% of respondents said buyers have a “strong or some interest” in a completed home with 56% of real estate agents finding their buyers with a strong interest.

"They're not coming into the house and saying, 'Oh, it's got great bones. We can do X, Y, and Z.’ They're looking at the pictures online and saying, 'It's done. We can move in. We don't need contractors breathing around us during this epidemic. We want to buy a finished product.'" – a real estate professional based in Washington, D.C.

• Open Floor Plan – Despite an initial hesitation to open floor plans with current work-from-home conditions, real estate agents find more than 92% of home buyers have a strong interest or some interest in open floor plans. 
• Outdoor Space – With the pandemic persevering, outdoor living space remains a top priority with more than 42% of real estate agents seeing buyers having a strong interest and 49% noticing some interest.

"We're seeing a lot of folks are reclaiming some of their outdoor area to make it a more livable space. Maybe they're going to have a screened-in porch added to their house or a nice patio." – a real estate professional based in North Virginia with more than six years of experience

Additional findings:

Though remote work drives greater need for home offices, only one in three real estate agents found their home buyers have a strong interest in a home office. Likewise, realtors found efficiency appeals strongly to home buyers (31%), and almost a quarter of all real estate agents report strong buyer interest in homes because of their “newness.”

“There is increased demand for new construction housing. Their increased building costs are also pushing sales prices beyond appraisal values.” - a real estate professional based in Dallas, Texas, with more than four years of experience

“The housing market has honestly not slowed a bit for me or my clients. New home builders are booming, and I don’t see any indication of slowing down any time soon. Home prices are climbing slowly though.” - a real estate professional based in Houston, Texas, with more than 11 years of experience

Other buyer motivations with some interest included proximity to a city (47.51%), proximity to travel (40.07%), and smart homes (39.67%).

Size does matter!

Home buyer trends

Real estate agents found more than half of their home buyers are motivated with strong interest to find a larger dwelling (57%). An additional third of all home buyers have some interest in upsizing. 

“Moving out of an area” also garnered a top slot with half of real estate agents seeing a strong interest from buyers to leave their current neighborhood. Forty-two percent also found buyers’ desire to “move locally” with strong interest. Downsizing had the least amount of interest among home buyers, which can be attributed to the high prices for smaller homes.

“There are a lot of people looking to downsize, but the prices of smaller places are too expensive and larger homes have not maintained their value. It makes no sense to move into a smaller place and not be able to put some money in the bank from the sale of their larger home.” - a real estate professional based in Pittsburgh, Pennsylvania, with more than four years of experience

Home buyers are also leaving their higher-density living arrangements (such as condos or apartments) in favor of lower-density dwellings (such as single-family houses). More than half of real estate agents find buyers with strong or some interest in this housing shift.

Home seller trends

One in three real estate agents report home sellers have a strong interest in moving locally and downsizing, though almost half found home sellers have some interest. Only 22% of real estate agents noticed sellers with a strong interest to upsize their current living conditions. Likewise, “moving out of the area” was only a strong motivator observed by 19% of real estate agents, though many agents in rural and suburban areas have reported a mitigation of buyers from cities.

“I have definitely seen more relocation buyers and also more local owners looking for more space/privacy due to working from home.” - a real estate professional based in Charlotte, North Carolina, with more than 21 years of experience

Almost half of real estate agents have observed their sellers moving to low-density homes (single family) or staying in the same type of dwelling.

In the next part, we’ll explore the biggest challenges and positive changes in the market as a result of the COVID-19 pandemic. 

About vipHomeLink

vipHomeLink LLC, based in Morristown New Jersey, launched its digital home management solution in 2018 with the deep belief that homeowners need a solution to help simplify the experience of homeownership. With interactive reminders, engaging content, and expert home recommendations, the Company’s app empowers homeowners to maintain, organize and improve their home. Visit us today at www.vipHomeLink.com.

Learn how vipHomeLink can help enhance your relationship with current and potential clients by visiting our real estate partners page now!

Survey methodology and background

The vipHomeLink H1 - 2021 Realtor Outlook Survey was conducted as a web-based survey between February and March 2021. It consisted of 18 questions, and survey respondents were asked to evaluate statements regarding key aspects of the real estate market using associated 4-point Likert scales. Survey respondents included 390 real estate agents and brokers in 14 states. More than 90% of respondents had more than four years of experience in the industry, with 18% having more than 30 years.