The pandemic presented the country with hurdles that caught everyone off guard. Millions of people lost their jobs. Hundreds of thousands of small businesses have shut down. People face economic hardship and we’re still struggling with getting people to wear a face mask!
Despite all of the troubles the United States faced in 2020, there may be some light at the end of the tunnel – especially if you’re in the real estate business. In a 4th quarter survey released by Homelight, they asked top selling agents what they think will happen to their market in 2021. Here are their top predictions for 2021.
1. Housing inventory is dreadfully low
There’s no shortage of eligible buyers that are flocking to their local real estate office, but 84% if surveyed real estate agents are concerned because there simply aren’t enough houses for sale to satisfy buyer demand. This is still a problem in markets where there’s an interest in new build homes.
2. Buyers gain confidence as they get vaccinated
As vaccines start to be distributed around the country, sellers who once were afraid to keep their homes on the market are relisting and are welcoming interested buyers to look at their properties. Buyers who are entering the market feel more confident that they’ll have a lower risk of being infected as millions of vaccines are distributed.
3. Agents fear increased homelessness is unavoidable
Even though President Biden signed an executive order to extend the moratorium on foreclosures and evictions to March 31, 2021, 40% of real estate agents are concerned about the likelihood of an increase in the homeless population in their area if people are still in dire straits.
4. Low interest rates brings buyers to the market
In the survey, an overwhelming majority of surveyed real estate agents (97%) say the current low interest rates are one of the main reasons they’re seeing so many buyers entering the market. It would make sense because a single percentage point increase in the mortgage interest rate could cost you tens of thousands of dollars over the life of the loan!
5. More people consider relocating because of remote work
As the likelihood of remote work becoming a permanent policy in many businesses, 19.8% of agents in the Pacific region believe this shift is going to be a big reason why folks are going to move away from the big cities and relocate to a less densely populated area like the suburbs.
6. Agents have tools to meet any challenge
The virus has made us alter the way we go about our daily lives. Real estate agents in particular have had to think on their toes and think of new ways to complete transactions while adhering to safety protocols. So, they’ve relied heavily on technology such as video conferencing, digital closings, and 3D or virtual tours. It is with these tools in their arsenal that they’ll be ready for any other challenges the virus may present in the future.
7. A $15,000 tax credit could be a godsend for first-time buyers
Affordable housing seems to be a constant problem in this country and for a first-time buyer, it can be pretty darn hard to save enough money for the ideal 20% down payment. This may not be so difficult if President Biden’s proposal of extending the Recovery Act’s $15,000 tax credit. However, under this proposal, first-time buyers could use that tax credit immediately for the down payment instead of waiting until next year’s tax season to claim it.
The future of the real estate market may feel like a mystery, but it doesn’t have to be. When you want to know where the market is headed, always look for housing market trends for a good idea.