Buying and selling a home has always been a major life decision/milestone, but now that we are living with COVID-19 is it even more stressful and complicated than before? Is it worth attempting right now?
There are at least three reasons to be optimistic about real estate in 2021. This year will be remembered for many reasons, and optimism is one thing that’s been in short supply since the spring. We’re experiencing a global pandemic, social unrest, an economic downturn, and natural disasters, just to name a few. The challenges brought on by the health crisis have also forced many homeowners to reevaluate their space and what they need in a home going into 2021. So, experts are forecasting that next year is one in which we can be optimistic about real estate for three key reasons.
1. The Economy Is Expected to Continue Improving
Tim Duy from the University of Oregon says, “There is nothing fundamentally ‘broken’ in the economy that needs to heal…there was no obvious financial bubble driving excessive activity in any one economic sector when the pandemic hit…With Covid-19 cases surging again, it is understandably hard to look optimistically to the other side of this winter… Don’t let the near-term challenges distract from the economic stage being set for next four years.”
Prices have stayed steady with less inventory on the market. This results in sellers often fielding more offers and closing on sales quicker than usual.
On the buyer side of real estate, things have changed several times over the past few months. Early on during COVID-19, lenders and down payment assistance programs raised their qualification standards for mortgages. Even those with good credit scores were having a hard time getting approved. It seems that many of those companies have now loosened those restrictions.
Given the sudden financial uncertainty that 2020 presented many of us with, it becomes even more important to have a strong budget in order before considering buying.
2. Interest Rates Are Projected to Stay Low
In the latest projections from Freddie Mac, interest rates for a 30-year fixed-rate mortgage are expected to remain at or near 3% next year. These low rates will continue to make homes more affordable, driving demand for housing in 2021.
3. Future Home Sales Are Forecasted to Grow
The housing market made an incredible recovery in 2020 and is now positioned for an even stronger year in 2021. Record-low mortgage interest rates are a driving factor in this continued momentum, with average rates hovering at historic all-time lows.
According to the latest Realtors Confidence Index Survey from the National Association of Realtors (NAR), buyer demand across the country is incredibly strong. That’s not the case, however, on the supply side. Seller traffic is simply not keeping up.
While the economy improves and interest rates remain low, homes are also expected to continue appreciating as more people buy in the coming year. Danielle Hale, Chief Economist at realtor.com, says: “We expect home sales in 2021 to come in 7.0% above 2020 levels, following a more normal seasonal trend and building momentum through the spring and sustaining the pace in the second half of the year.”
Buyers need to remain patient in the search process. At the same time, they must be ready to act immediately once they find the right home since bidding wars are more common when so few houses are available for sale. Sellers may not want to wait until spring to put their houses on the market, though. With such high buyer demand and such a low supply, now is the perfect time to sell a house on optimal terms.
Let’s Connect! Experts forecast that buyers and sellers are going to be active in 2021. If you’ve thought about buying or selling your home this year but have held off, now may be the time to take advantage of this market. Let’s connect to take the first step toward your new home today.
Safety and Process: The biggest changes in real estate during the COVID-19 pandemic really have been in the actual process. In a year when we’re learning to do so much remotely, homebuying is no exception. From going to work to attending school, grocery shopping, and even seeing our doctors online, digital practices have changed the way we live.
To help with social distancing, many real estate agents are now during virtual tours of homes either before showing the home to an interested buyer or in come cases, in place of in-person showings. While following the regulations set forth by the CDC and all local guidelines, we’re empowering buyers and sellers with virtual tours, 3D floor plans, high-quality photos, videos, online open houses, and more.
At Boeve Properties, the safety of our clients and our team is of paramount importance and top of mind at all times. Rest assured that when you work with us, we’re mindful of your health and well being.