This is not your parents' real estate market, which is to say, changing times prompt changes in the real estate market, and today's is no exception. On the contrary, today's real estate market has confounded analysts and defied history by providing opportunities for buyers and sellers alike to benefit. The following are four new trends shaping today's unique real estate market.

Supply Shortage

At the start of 2021, the number of homes on the market was at a record low, but that ebbing tide has been flowing back in, of late. According to the June 2021 Monthly Housing Report, inventory levels are on the rise again, growing by almost 11% month-over-month and by over 5% year-over-year.

This means the advantage still goes to home sellers, who benefit from a smaller selection for homebuyers to choose from, though not for much longer. The increase of homes available for sale, and hence a "buyer's market," will move at a different pace in different states. For example, in Louisiana, hit hard by recent hurricanes and largely rural, that shift may come at a snail's pace.

Demand Glut

At the same time as supply in the housing market is near all-time lows, demand for available homes for sale is near all-time highs, if only relatively speaking. Regardless of whether the higher demand is in aggregate or proportionate, the results are the same. Namely, it leads to increased competition among buyers and, subsequently, bigger bidding wars.

According to the National Association of Realtors (NAR) Realtors Confidence Index, the average home on the market as of May 2021 received five offers. If buyers can't compete on price, they may offer to pay all cash or waive certain contingencies instead. In any case, it once again benefits the sellers.

Price Appreciation

Thanks to all this buyer competition, home prices are shooting up. The latest CoreLogic Home Price Index (HPI) finds more than a 14% increase in home prices year-over-year as of May 2021.

As home prices appreciate, investing in real estate becomes increasingly lucrative, thereby exacerbating competition among buyers, fueling the whole cycle to perpetuate and grow. Moreover, when those real estate investors eventually decide to sell an investment property, they're almost certainly going to seek a higher price than they paid, also further feeding this feedback loop.

Equity and Value Inflation

The value of any home a homebuyer buys will also appreciate, beyond merely what the home's new owner pays against their mortgage.

This empowers current homeowners as well to consider a home equity loan or line of credit against the appreciated equity in their home. Interest rates happen to be near record lows at the moment, so not only can you capitalize on the inflated value of your home, but you can do it now for next to the lowest cost possible.

Whether you want to sell your home or you're looking for homes for sale in Baton Rouge, knowing ahead of time the market headwinds and tailwinds you'll be confronting will help you to better navigate your course toward your desired destination.