The effects of the pandemic have been devastating for countless businesses and industries across the nation. But, interestingly enough, the real estate industry is showing how resilient it can be. Due to the resilience, many folks wonder how the housing market will fare in 2021.
For those whose New Year’s resolutions included buying your first home, selling your home to upgrade or downgrade, or buying an income property, you probably should’ve read up on the housing trend predictions listed in HomeLight’s survey. This survey includes insight into where the market has headed.
#1. Demand is greater than inventory
Table of Contents
- 1 #1. Demand is greater than inventory
- 2 #2. As vaccines roll out, confidence in the market improves
- 3 #3. Millions are at risk of becoming homeless
- 4 #4. Buyers are jumping for joy over low interest rates
- 5 #5. Remote work may spark more people looking to relocate
- 6 #6. If COVID surges again, real estate agents are ready
- 7 #7. $15,000 tax credit helps first-time homebuyers
Although there’s an influx of buyers entering the market, there simply aren’t enough houses available for them to buy. Of the real estate agents who participated in the survey, 84% say their inventory is significantly lower than they anticipated. Sellers may want to cash in on this inventory shortage because buyers are likely to do whatever they can to make sure their offer is accepted. Some of the stakes they’re willing to take include engaging in bidding wars, forgo certain contingencies and inspections (not a good idea), and even offer to pay above the asking price!
#2. As vaccines roll out, confidence in the market improves
Sellers who had their homes listed at the very beginning of the pandemic took their houses off the market because they were afraid of getting infected – rightfully so! This slowed down the market quite a bit, but since two vaccines began rolling out, half of the surveyed agents say buyers and sellers are beginning to feel more confident in entering the real estate market.
#3. Millions are at risk of becoming homeless
The United States already has a homeless problem, being that there are over 550,000 million who don’t have a roof over their head. Should the eviction and forbearance moratoriums come to an end on January 31st, 40% of real estate agents worry that there will be a big jump in homelessness as people are kicked out of their homes – rental or not.
#4. Buyers are jumping for joy over low interest rates
Although the economy isn’t doing so well at the moment, there are still people who need (or want) to buy a house. Who could blame them when interest rates are still incredibly low? In fact, low rates are a huge reason 97% of agents are seeing a big influx of buyers in their market.
#5. Remote work may spark more people looking to relocate
Once the pandemic became more of a serious threat, employees who were able to work remotely have done so for months. It’s believed that many of these remote jobs will become permanent and since folks no longer need to commute to work, there’s no reason to stay in the city. The Pacific Coast in particular is probably the region that will be most affected by the permanent work-from-home policy, according to 19.8% of surveyed agents from that area.
#6. If COVID surges again, real estate agents are ready
Like other industries, real estate has had to adapt in order to keep business going. This resulted in agents relying heavily on 3D tours, virtual tours, digital closings and video conference calls. Fortunately, these measures means they’ll have absolutely no problems continuing to do business should there be more waves of COVID in the future.
#7. $15,000 tax credit helps first-time homebuyers
One of the biggest challenges first-time homebuyers face is saving enough money for an adequate down payment, which is typically 20% of the purchase price. In an effort to help first-time buyers, President Biden proposes to extend the Obama-era Recovery Act, which would grant first-time buyers to use a $15,000 tax credit immediately for a down payment.
It’s not easy to make the decision to sell your house or buy a new one, especially when the economy is so up in the air. However, you can alleviate some of that worry by consulting a top-selling real estate agent in your area for advice. With their help, you’ll have a better sense of whether this is the right time to enter the market.
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