Expect the housing market to be very strong in 2021. That’s the general consensus of your typical realtor in most areas of the country. Shalom Lamm, a realtor keeps up with these trends. Already the market has been strong for sellers in 2020, despite the fact that your average realtor had to do virtual walkthroughs and showings in 2020 due to the COVID-19 pandemic. Two factors tended to affect real estate on the high-end for sellers. One is that there tended to be a rush back to the suburbs as more and more people found themselves commuting to work from home. With no commute to consider, the suburbs, with its wider spaces and generally cheaper real estate, was more and more attractive. Secondly, interest rates dropped dramatically in 2020, and some homeowners were able to snag loans as low as 2.75 percent interest. The bad news for buyers is that many homes in late 2020 barely remained on the market for two months or less. And often the houses sold for $30,000 to $50,000 over the listed sale price.
Most real estate agents predict that in 2021, the sale of houses will actually increase by over 7 percent. And housing prices themselves will likely appreciate by nearly 5.7 percent. This means that those who have the credit scores and the means to make substantial down payments will be in the catbird seat in 2021, while those with less credit or less down payments will often be forced to sit on the wayside. The good news, according to some realtors, is that in the fall of 2021, new housing construction may have accelerated enough that the market for houses might ease up a little in terms of availability. Another key factor in 2020 was buyer’s remorse. According to Business insider, a whopping 55 percent of buyers who bought during the pandemic almost immediately regretted their decision. Hopefully, with a new vaccine for COVID-19 on the way, the belief in the strength of the economy will spring back but it all depends upon the effectiveness of the vaccine.
Professor Ugur Sahin, BioNTec c0-founder and a major investor of the vaccine predicts that it will probably take until late fall, early winter of 2021-2022 for major economies to get back to normal. Dr. Anothony Faucci says he is cautious that by the end of next summer most people will not have to wear a mask, and there will be no lockdowns in effect, but it may take significantly longer, even a couple of years to return back to a sense of normalcy. As a consequence, as the economy goes, so will go the real estate market. Expect that it will take at least till next fall for the real estate market to really heat up and it will come in small waves, not huge bursts. Meanwhile, with home prices booming and bankers reluctant to finance loans for those with solid credit and down payments, and real estate prices rising, expect to pay at least 5 percent more total for real estate and obtain interest rates of around 3.7 percent or greater. Shalom Lamm recommends checking the market at least once a day.