Sunday, March 7, 2021 / by Cindy Hurley
While the COVID-19 pandemic wreaked havoc across the globe, and many states issued lockdowns for everything deemed nonessential, the real estate market came back strong in 2020. With the pandemic still affecting daily lives, you can expect to see it shape real estate in 2021; let’s take a look.
March 2020’s lockdown sent real estate transactions to a grinding halt, forcing all industry areas to rethink how they do business. In fact, much of the technology used during the pandemic existed but wasn’t widely adopted. With virtual tours, remote showings, and digital closings now the norm, the real estate industry shouldn’t be flipped on its head during a virus surge.
Remote work will encourage more moves
Many employers are expected to make many positions permanently remote in the coming months. With more companies embracing remote jobs, employees are free to choose where they want to reside without having to factor in commutes.
HomeLight, a leading real estate referral agency, conducted a fourth-quarter survey of top agents across the country to get a feel for market conditions. According to the survey, 14.5 percent of agents believe that the shift to working from home will significantly impact real estate in the coming year.
Homeownership will be more accessible
If you’re one of the many people whose New Year’s resolution includes homeownership, the entry point is about to get a little easier. With the new year comes a new administration in the Oval Office, and President Biden has vowed to make housing affordable for everyone. With hefty down payments creating a hurdle for many, the Biden administration has promised to introduce a First Down Payment Tax Credit. With this initiative, homebuyers receive the tax credit – up to $15,000 – when they make their purchase, rather than waiting until they file taxes the following year.
Low interest rates
After hitting historic lows in 2020, mortgage interest rates are expected to remain low and continue to heighten buyer demand and drive real estate sales. In fact, 97 percent of agents surveyed said that low interest rates boost buyer demand in their markets, and 34 percent of agents expect those rates to rise as more people receive the COVID-19 vaccine and the economy improves. This suggests that it’s better to buy earlier this year than later.
Many homes will go into foreclosure
Sadly, many Americans won’t be able to rebound from the devastating consequences of the pandemic. Forty percent of agents believe that the end of forbearance periods and stimulus plans will cause an increase in foreclosures. However, with the market remaining strong and with demand remaining high, the chances of selling before facing foreclosure are significantly increased.
The Vaccine will boost consumer confidence
Many would-be sellers in 2020 opted out of listing their homes because of the uncertainty surrounding the coronavirus pandemic. Half of agents across the country said a widely distributed vaccine would encourage more sellers to enter the market and unlock sought after inventory.
Continued lack of inventory will influence the market
Eighty-four percent of agents say that inventory is lower than expected, and 20.5 percent of agents believe that a continued lack of inventory will be the most significant influence on housing in 2021. While this will vary by region, a Census Bureau survey reports that the nation’s newly constructed home supply is halved, with a three-month supply on-hand.
Perhaps the biggest takeaway from the survey data is that agents across the country are optimistic about the real estate market in 2021. Low interest rates, freedom of movement, reduced affordability challenges, and an industry well equipped to deal with virus surges bode well for the coming year.