When the country’s economy seemingly came to a grinding halt, the real estate market continued to stay afloat. 2020 was a year like none other and as a result of these challenges, people are scratching their heads in regard to what can be expected in 2021’s housing market.
For those who like to be in the know and have a good idea of what lies ahead before buying, here are the top 7 buyer housing market trends for 2021, which can be found in greater detail in HomeLight’s survey about 2020’s fourth quarter.
1. Demand for housing exceeds available inventory
Across the nation, Homelight asked real estate agents how their market is faring and 84% are reporting that the available inventory is much lower than anticipated. They’re concerned because there are more buyers than houses, which is great for sellers because they could experience fierce bidding wars, clean offers, or offers above asking price.
2. Buyers sign in relief as COVID vaccines are distributed
When the pandemic began, houses were pulled off of the market because sellers were concerned about getting infected. However, 50% of agents are seeing an increase in activity as vaccines continue to be distributed around the nation and folks become more confident about entering the market.
3. Millions face homelessness if moratoriums end
There are about 20 million people who are at risk of eviction because they are so far behind in rent due ($6,000 on average) to the pandemic and job loss. On the first day of his administration, President Biden signed an executive order extending the eviction and foreclosure moratoriums until March 31st. However, if the economic troubles persist, 40% of agents believe they will see a significant increase of homelessness in their area.
4. Buyers take advantage of low interest rates
Right now, the interest rates are sitting at 3% for a 30-year fixed rate mortgage and buyers recognize that rates are only going to increase as things improve. So it’s quite understandable that 97% of agents are seeing so many buyers entering the market.
5. Relocating becomes reality if remote work is permanent
It’s expected that many of the employees who have been able to work from home will be working from home permanently. What this means is that homeowners won’t need to commute to the office anymore and if they live in an expensive area, they could move somewhere cheaper and save a significant amount of money. The Pacific coast is most likely to experience this mass relocation, whereas the South Central region will be the least likely to see this trend.
6. Real estate agents are ready for future outbreaks
One of the challenges real estate agents faced at the beginning of the pandemic was how they would continue to do business while adhering to safety and social distancing protocols. Fortunately, with quick thinking and technology, agents have been using virtual and 3D showings, video conferencing and digital closings to keep transactions rolling. They’ll continue to use these tools should the virus continue to surge, they’ll be ready!
7. $15,000 proposal could help first-time homebuyers
If you’re going to purchase your very first home but you’re worried about how you’ll get the money for a sizable down payment (20% is ideal), you’ll be happy to know that President Biden has proposed to extend former President Obama’s Recovery Act. In this proposal, you could use the $15,000 tax credit immediately to make your down payment instead of waiting until tax time to claim it.
Whether you’re buying your first home, selling your property, or looking to buy rental properties, the current state of the economy can be a little unnerving. However, by being aware of the predictions for real estate in 2021, you may feel a little more confident in moving forward with your plans. Of course, if in doubt, you can always turn to your real estate agent for advice.
Contributed by Kelsey Luvisa, Homelight