7 Top Housing Trends That’ll Shape the 2021 Real Estate Market
There’s no ifs, ands or buts about it - 2020 was a crazy year! With all of the turmoil the country had (and continues to) to endure, the real estate market has proven to be able to keep its head above water - even though activity was lower than expected due to COVID-19.
With that said, 81% of real estate agents who participated in a recent survey by Homelight are quite optimistic about the future of real estate. Here are seven of the top market predictions for 2021 worth taking note of.
1. Lack of inventory
The future of the real estate market relies heavily on inventory. You may have a lot of buyers ready and able to purchase property, but according to 84% of agents, there simply isn’t enough inventory to meet demand. An inventory shortage (even within markets where new construction is sought after) leads to increased housing prices, bidding wars, and even buyers adding little to no concessions with their offers in an effort to get their offer accepted.
2. Vaccine distribution boosts confidence
One of the biggest reasons there was a lack of inventory is because sellers were afraid of contracting the virus and rightly so. However, more than 7 million doses of the vaccine are available and will be distributed throughout the year. This is great news and 50% agents say this news is making both buyers and sellers more confident about venturing into the market.
3. Mass evictions and foreclosure are on the horizon
Homeowners and renters alike are facing homelessness once the mortgage forbearance and eviction moratorium programs end on January 31. This is a major concern for 40% of agents because if you have a foreclosure or an eviction on your credit, it will be much more difficult to find a new place to call home.
4. Demand will increase due to continued low interest rates
If you do have the credit, money, and a reliable job to go ahead and buy a house, this would be an ideal time to do so. Why? It’s simple - the interest rates are so low. Low interest rates are such a huge driving factor, 97% of agents are seeing more people interested in buying just for that reason. Just keep in mind that with the roll out of the vaccine, 34% of agents predict that this will change and rates will increase as the economy picks back up.
5. Remote workers will consider relocating
As remote work becomes a permanent practice across many industries, employees who no longer have to travel to work are likely to consider relocating. The Pacific region (namely California) is expected to be the region with the most relocations, according to 19.8% of surveyed agents.
6. Due to adaptations, agents will be prepared for virus surges
Real estate agents saw a dramatic decline in sellers putting their houses on the market and for agents who did see activity, they had to adapt to the new social distancing and safety protocols brought on by the virus. Adaptations like using virtual and 3D tours, closing the deal digitally, and video conference calls are likely to be used if there’s another virus outbreak.
7. Extended tax credits will help first-time homebuyers
Another concern that’ll affect the housing market is access to affordable housing. Real estate agents say many first-time buyers struggle to save enough money for a sizable downpayment, which is usually 20% of the purchase price. Fortunately, President-Elect Biden has a plan to help buyers with said downpayment by extending the tax credit issued by the Recovery Act put into law in 2009 by President Obama. Under this proposal, first-time homebuyers would receive a $15,000 tax credit they can use immediately when buying a house instead of waiting to claim it come tax time. This proposal also states this extension would be permanent, too.
Although the pandemic has thrown a wrench into the works, these predictions should give buyers and sellers a little bit of insight on what to expect upon entering the market.