The real estate market has never been hotter. Andrew Delory is a Massachusetts real estate attorney at Delory Law and owner of his own real estate brokerage, Tutto Properties, LLC where for a decade, he’s enjoyed a front-row seat to a booming real estate market. In the last year, the real estate market has risen to record new heights, while this is good news for some, it has presented a unique struggle for others. Andrew Delory shares the current state of the market and gives his predictions for the remainder of the year.
What trends are you seeing in real estate presently?
This last year has presented the perfect storm for real estate. The pandemic brought interest rates down to record lows. A year ago, a good interest rate was 4%, now buyers are regularly getting rates in the 2’s. That fact alone would usually cause the market to soar. Add in that millennials, the largest generation on earth right now, are now all becoming first-time home-buyers at the same time. Additionally, new home construction is at historic lows. Low rates, high demand, and low supply have culminated in one of the hottest markets we’ve ever seen and a severe lack of inventory for Buyers.
Haven’t millennials been previously chastised for their lack of interest in home buying?
Historically, yes. But in the last year, many millennials who were longtime renters have been able to take advantage of low living expenses and break the rental cycle. Millennials have realized that with interest rates being so low, they have a real opportunity to get into a home for sometimes even less than renting. The decrease of interest rates by 1 – 1.5% lower, computed to an extra $40 – 50K purchasing power to put towards a home. This was invaluable for Buyers in a competitive market.
How do the older generations factor in?
The pandemic has also had an interesting impact on older generations’ buying/selling habits. Typically, many couples were leaving behind their larger family homes in favor of downsizing to a smaller condo after the kids left the house. During the pandemic, these empty-nesters have decided to stay in their homes as their desire for extra bedrooms, extra square footage, and outdoor space became gold.
What do you think we can expect from this next year?
I don’t anticipate the interest rates going back up anytime soon. I think we’ll see at least 2 more years of low-interest rates. Eager home buyers also aren’t going anywhere either, so the inventory shortage is going to continue to be an issue. However, I do expect to see people’s lifestyle preferences shift as the world returns to normal. In 2020, we saw people fleeing the city in favor of suburban living. And why not? If you don’t have to commute into an office every day, living further outside of the city, with more space is a huge benefit. But as things are opening back up, we are already seeing the city sales volume begin to accelerate. This will of course free up some of the inventory in the suburbs. It’s really all a natural ebb and flow.
What is your role in helping clients navigate all of this?
In the state of Massachusetts, if you need a mortgage to purchase a home, the bank will require you to use a real estate attorney to handle the closing. Historically, the lawyer would only get involved after the buyer had found the house and they got the offer accepted. What I have been able to introduce is more of a concierge level offering for buyers. The buyer now starts the process with me and together we vet the best lenders and real estate agents for the buyer’s specific needs. I am there every step of the way.
What is your top advice for homebuyers in 2021?
Two things. First, to win a bidding war, you need a superstar trio on your side: a real estate attorney, lender, and real estate agent. Second, be patient. Though it may seem impossible, finding your dream home is entirely doable, even in a market as hot as this.
To learn more about working with Andrew Delory visit www.delorylaw.com or @delorylaw on all socials.