Are you planning on buying or selling a home in 2021? Many people are wondering about the relationship between the real estate market, COVID, and 2021 and how it is going to affect their real estate plans.
With the year-that-shall-not-be-named behind us, many people are feeling optimistic about the future of the housing market. Should you be, though?The pandemic has turned the real estate market upside down. Here are a few things to look out for in 2021! Click To Tweet
Many people expected the housing market to crash last year due to the pandemic, but it didn’t. Well, that isn’t exactly true.
There was a brief halt in the real estate market in the spring months just after the shutdown when things were up in the air. It rebounded quickly and became a hot, record-breaking market throughout the rest of 2020. 2021 may just surprise you as well.
Residential Real Estate Market 2021
Experts are weighing in, and much of the chatter around the real estate market in 2021 is that we should expect to have another hot real estate market this year. Not to mention historically low-interest rates.
People’s desire to have more space (thank you pandemic) has driven the market this last year. If you are selling a house in 2021, it looks like this year will be great for you.
There are almost double the average number of homebuyers shopping for homes right now. Many of those shopping for homes end up in bidding wars which often ends in houses selling for over the asking price. This is definitely a seller’s market.
That being said, if you happen to be shopping for a home in 2021, things won’t be as great for you. Interest rates are down, yes, but housing prices are not decreasing (in fact, overall home prices are steadily increasing). Your best bet is to use a mortgage calculator to make should you can actually afford your purchase.
As we mentioned, many homes are selling for over the asking price, and there are more buyers than there are homes available. In addition to housing prices going up, so are building supply prices. This means that new construction is slower right now, which adds to the shortage of houses on the market.
Surprisingly to many, interest in suburban areas has grown exponentially (likely due to increased remote work, etc.) throughout the last year. This means that it’s not just the cities that are experiencing this housing boom.
Here are another couple of exciting things to note about the housing market:
It did not significantly dip down during the fall and winter months as it often does. Home sales continued to rise steadily.
Homes are selling fast. In speaking with a professional real estate broker, I learned that a home that a year ago would have been on the market for a month or two has been receiving multiple contracts within the first three days of listing. This is very, very fast and good to know if you are a buyer.
Office/Commercial Real Estate Market 2021
If you are curious about the office or commercial real estate market for 2021, it doesn’t look good. With the pandemic and subsequent shutdowns, many people are working remotely from home right now.
Many remote workers are expected to transfer to remote work indefinitely, which means less need for office/commercial space.
Additionally, many businesses are expected to shut down in the first half of the year. This will mean lots of empty commercial space available, though, and experts say that landlords will likely be dropping rental costs by as much as 25%.
If you need commercial space and have the budget for it, now might be a great time to take advantage of that.
Analysts are predicting that these numbers will come back up later in the year.
General Information as it Relates to Real Estate, COVID and 2021
Although we are generalizing what has been happening and what to expect for 2021 in all the major markets as a whole, specific areas may be different. The pandemic has hit the country hard.
However, some places have been hit worse than others.