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Realty experts say low interest rates are causing a boom in the housing market

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Posted at 6:11 PM, Jun 29, 2021
and last updated 2021-06-29 22:40:20-04

Realty experts say low interest rates are causing a boom in the housing market, leaving buyers with limited options.

Local realtors say buying a house isn't as easy as it used to be pre-pandemic. Prices are soaring and inventory is hard to come by, especially here on the Central Coast.

"There are a lot of buyers out there but not a lot of homes," said Haven Properties realtor April Dean.

It's a problem many Central Coast residents have encountered in recent months.

Dean attributes this housing shortage to an influx of residents from nearby cities and out-of-state buyers who want to live on the Central Coast.

The demand from buyers lessened the inventory available leading to rising home costs.

"This time this year we're seeing about half the inventory as we normally see," Dean said.

She says many homes are selling for more than the original asking price.

"Right now, if they're priced right, they're gone within the first week. So we're seeing about 7-8 average days on market and multiple offers," Dean said.

Taylor Hoving Realty Group real estate agent Jill Jackson is having a similar experience.

Jackson says the time houses spend on the market is very short right now. Some sellers are receiving multiple offers within days of listing their property.

"For an example, I just listed a home and it was on the market three days and I received 23 offers," Jackson said.

She says home prices are on the rise and the listing price is often just the starting price.

"I would say probably 90 to 95 percent of the time in our current market they are selling above the listing price," Jackson said.

She says rising prices can be directly attributed to low interest rates and low supply of homes.

"Prices have definitely risen since pre-pandemic and I think it's just the low interest rates and the low supply of homes. So because there's low interest rates, there's a lot of buyers trying to get into the market while the interest rates are low and we just don't have enough homes or enough building going on currently for the demand," Jackson said.

Though some buyers are having a difficult time finding a home, the good news is it is a great market for anyone looking to sell their home and make a profit.

According to the National Association of Realtors, recent sellers typically sold their homes for 99 percent of the listing price and the typical home sold was only on the market for three weeks.