As we wind down this crazy year of 2020, what should we expect in real estate trends for 2021? While the pandemic did disrupt home sales in the spring of 2020 which is usually considered the hottest season for real estate, the market quickly made an impressive rebound. Real estate experts have reported that the surge in home sales toward the end of 2020 made up for the spring market losses. Will we see more of the same results in 2021? How will the housing market shake out in our current economic climate? No one has a crystal ball to determine what 2021 will bring. However, we can hope for the best for our economy and community.
Mortgage rates should remain low according to the Federal Reserve which in turn will keep the buyers searching for their next or first home. Sellers however may still be leery of the market and our inventory could remain low in 2021. Low inventory means you need to be on your toes when you go house hunting—the best homes will likely be snatched up fast. In October 2020, more than 7 in 10 sold homes were on the market for less than a month.
So, what can you do? If you can’t find the house you want, be willing to give up some “nice-to-haves” for your “must-haves.” Find the least expensive home in the best neighborhood you can afford and upgrade over time. What if the location where you are planning to buy is too competitive? You might be surprised at the gem you can find in a less popular neighborhood. Working with a real estate agent who really knows the area is the best way to find a home that fits your budget and lifestyle.
Getting preapproved for a mortgage before you go house hunting is a must in any market. But in a market with such a limited home supply, not doing this legwork ahead of time gives a preapproved buyer free reign to swipe the home you want right out of your hands.
What does a low inventory market mean for sellers? It means low selling competition! Since your home will be one of the relatively few listed on the market, you could be in the driver’s seat. So, enjoy possibly picking the best offer and moving at a pace that best suits your timeline.
Home prices are still rising. Buyers should absolutely find out what they can really afford and commit to staying within that budget amount no matter how much pressure you feel watching competitors pluck good homes off the market.
Talk to a local lender, contact your REALTOR®, and start your house hunting today. If you are a seller, prep your home for the spring market and start packing.
Hope you all have a wonderful Christmas! Remember to do good things!
Stephanie Lemley, 2021 MBOR President