As real estate professionals, we get asked quite often about the real estate market in our area. What’s driving the market? Will the interest rates continue to be low? Is it a seller’s market? What about prices? I’m not seeing for sale signs in yards? Is the inventory low? Last year was an unexpected year for real estate and our area was one of those that really had a boom. That positive trend should continue in 2021 according to all that I read. Home sales are expected to increase by about 10% and prices will climb as well, but probably not as much. As the economy gets stronger and vaccines become more widely available, we may transition back into a somewhat normal life. We can all hope for that. Low interest rates have been the key reason for the housing market’s surprising strength during the pandemic. In our area, I believe the way local Realtors handled the preparation of properties to sell and showed homes in a safe and creative way was a key factor in the confidence buyers and sellers responded to the situation. Other urban parts of the country did not fare so well and are still suffering a low market response.
So what can we expect for 2021 in our local market? Interest rates will continue to be favorable, according to lenders in our area. Rates may linger around 3% on average, which are still at or near historic lows. This will be a positive factor in affordability for first time home buyers as prices continue to increase. When paired with record-low interest rates, lower budgets can still buy more house than a year ago. Lack of inventory will also be a top factor in our market both in re-sales and in new construction where the build time plays a part. This scenario has created a fast paced selling cycle which is good news for sellers, but a difficult experience for buyers. That’s when an experienced Realtor comes into play to help buyers and sellers navigate this confusing and often stressful market. So, is it smart to buy a house this year based on those factors? If you believe that interest rates will be higher in a year and/or home prices will be higher a year from now, the answer is yes. From a financial aspect, if you find a home that meets your needs now, it makes more sense to purchase in 2021 than next year.
Is it a good time to sell my house? In this kind of market, the seller has an advantage as discussed. They can use their equity towards a new home while also taking advantage of low rates. Selling and buying – it’s what makes the real estate market go round. Whether buying or selling, pick up the phone and call a local Realtor. Make an appointment to discuss the process and your options. There is more than meets the eye in yet another year of pandemic real estate.
Sources: NAR, Keeping Current Matters, Homelight