Senior economists in this country are predicting a bullish Real Estate Market in 2021, with home prices reaching a 14 year high by the end of year 2020. And there are strong indicators that uphold this assumption like: shortage of inventory, competitive market and buying/selling behavioral changes of seniors due to COVID. In some areas of the country there was a 50% year over year decline in inventory, and these were mainly the suburbs of America as people decided to flock into smaller towns and cities to avoid crowded areas due to covid. And then you also had the WFH (work from home) environment encouraged by most companies throughout the country.
These factors have caused suburbia to become the new urbia in 2020 and this trend will continue in the future as the pandemic may have changed our lifestyles forever. For the better or worse? That I believe only time will tell, but it did make us believe that anything is possible.
What does this mean for buyers?
If you are a buyer, you may be in for a rough and very exciting ride. Rough ride in the sense, that there is a real shortage of home inventory and you will need to compete with other buyers. But then you have all time low mortgage interest rates, so you are able to have a very affordable mortgage payment. You may be put in multiple offer situations and have to stay competitive on terms when buying in this market. The exciting news is that deals are getting done and people are getting homes.
More on the rates being low:
In a lot of cases you may be able to secure a mortgage payment that is at the same price as the going rents of the area and in some cases the mortgage payment may be a little bit higher than rent, but very affordable. This has been very promising to a lot of buyers because their money can buy more in this market. So talk to a loan officer and find out what your mortgage payment will be, it would be a great practice to have a conversation with a loan officer and get qualified, even if you are planning to buy at a later date.
Tips for Buyers:
- Expand your range of homes by looking in multiple cities, be open to exploring neighboring towns and cities this will really increase your options. And having more options will mean you will have to compete less.
- Work with an agent that can add enough influence on the transaction and a loan officer that is responsive and communicates well and efficiently. Because in order to be the first few offers to catch the interest of the selling party, you have to work with the best!
Stay calm and stick to the plan! Setting your mind on it and staying consistent with the home search process will surely get you to land a deal! I hope this video and write up awas informative to you guys. Wishing you luck on your home buying process. Until next time…