2020 was a challenging year for many people. The pandemic has turned our world upside down. So much has happened throughout the world that more significant changes in every market were inevitable. The pandemic struck on a spring, in the hottest season for real estate, and it disrupted the beginning of the best time to buy and sell houses, so the market had to make a comeback. After the situation calmed down a little, experts have reported an impressive surge in home sales at the end of 2020.
Whether you think about buying or selling homes, it’s essential to keep an eye on the upcoming trends and projected states of the market. So here are the five most crucial trends you can expect in 2021.
1. Low Inventory
It may be a hard thing to hear for every home buyer, but you will have a tough time finding a perfect home. As you can see on the example of the latest Palmetto Dunes real estate listings, homes are disappearing from the market at a crazy rate. For instance, in the whole country, inventory was down 22% in November 2020. What does it mean for you?
Basically, you can still buy a home from your dreams, but you will have to be quick. The best and most affordable homes will likely become unavailable in a short time. It would be best to decide quickly, as most homes’ average time on the market is predicted to be around a month. Hiring a real estate agent can give you the biggest chance of finding the best home you can afford. If the neighborhood you want to live in is too competitive, they can help you find some hidden gems in your price range and lifestyle.
It’s a dreamy situation for everyone who wants to sell. Low inventory means that you won’t have to worry about the competition, and you can probably sell your estate really fast. Your mailbox will be flooding with offers, and your phone won’t stop ringing. If you wanted to wait for a perfect opportunity, you got it!
However, the inventory of high-end homes is expected to grow. In three months, ending in November, luxury homes saw a 60,7% YoY increase, and new listings grew 31,5% during the same period. It is expected that luxurious homes will see another bump in prices. However, as the pandemic ends, the prices may come down very quickly.
2. High Prices
The lack of estates in 2020 caused a remarkable spike in prices. This trend is expected to continue in the nearest future, as the shortage is still in effect, and the demand is higher. During the pandemic, price gains nationally have been accelerating, and they were up to over 8% in November.
You can easily put your house on the market with about a 5% higher price, as the median is anticipated to rise by about 6% in the coming months.
Don’t forget there’s less competition, which means that right now, you can sell your house faster and with more profit than for the last few years.
Unfortunately, you will have to tighten your belt and prepare yourself to spend much more money to buy a house. It may be wise to save at least 15-20% for the downpayment. It will help you avoid PMI – an extra fee you have to pay if you have problems with your payment.
3. Low Mortgage Interest Rates
The average monthly mortgage interest rate has been dropping for the past year. It’s actually at the lowest point in 30 years. Some economists predict that in 2021 it will still hover around 3%
Lower rates can help you afford a new home, but don’t go over the board. A low rate for a house you can’t afford isn’t a great deal. Remember that they can go up at any time.
The situation can help you sell a house faster, as more people will be tempted with lower rates. The problem is, they can go up unexpectedly, so it’s best to prepare for your house to be on the market a little longer, just in case.
4. More Interest in Suburbs
Due to the home office mode and stay-at-home orders, people no longer have to worry about traveling to work. Some companies already decided that a part of their employees will work remotely even after the pandemic’s end. Thus, space has become an especially important commodity, and more people want to move to bigger homes. The suburbs are more popular than ever, and the trend is expected to continue.
5. Online Real Estate Market
Virtual walks around the house were getting more and more popular even before the pandemic. With social distancing, it became the only option for seeing homes for sale. It’s also more comfortable for people living far away from a potential house. Seeing this, many agents decided to utilize live stream features for open houses and spend more time on videos, photography, and virtual tours.
While some people may be cautious about buying such a big investment without seeing it with their own eyes, the digital tools will surely stick around in the future.
Conclusion
Selling a house in 2021 may be the best option you will have for a long time, but it can also be risky. The situation may change rapidly because of the vaccines and changes in the workplace. Many people feel that the market is not steady right now and are hesitant to make big plans for the future.
However, if you plan to buy a more high-end estate or sell an affordable house in the suburbs, it is wise to consider doing it right away. Lastly, it’s important to remember that the housing market leads towards recovery, and a crash is highly unlikely.