2021 Real Estate Market Trends to Know
We experienced median home selling prices of $300,000 in 2020. With 2021 in full swing, let’s take a look at what’s expected for the real estate market in the upcoming year. We have listed the top real estate market trends you need to know to be prepared for the 2021 housing market.
Market Trend #1: Home inventory will remain low
With interest rates remaining low, home inventory will also remain low. This means that the market is going to remain on fire! Home inventory was down approximately 20% in October 2020 and is predicted to remain low throughout the next year. This means that buyers need to act quickly when searching for their next home. For sellers, low home inventory and a hot market means that competition will be low but buyer’s demand will be high. As economies and cities begin to open back up in 2021, the demand will continue to increase which means so will competition for home buyers.
Market Trend #2: Selling Prices of Homes are Rising
Although it is predicted that majority of Americans will receive the vaccine in 2021, there is always the unknown. According to Forbes Magazine, “Even as the pandemic hopefully nears its end, Americans will continue to buy homes that fit their new lifestyle. As a result, 2021 will see more home sales than any year since 2006. Annual sales growth will increase from 5% in 2020 to over 10% in 2021. Rising prices for existing homes will increasingly drive more buyers to consider a new one. ”
What does a higher selling price mean for sellers?
While higher prices could provide sellers a larger profit, it is important sellers consider the competition. Pricing your home correctly is the key to receiving the most offers and making your listing stand out from the rest.
What does a higher selling price mean for buyers?
Buying a home in an expensive market can be daunting. Calculate your budget and stick with it. Be aware that purchasing a home in this market may cause you to sacrifice some of your wants for necessities. Also, be willing and open to find a more affordable home and then upgrade later as you save over time. It may also be worth expanding your home search process to look in other locations to maintain your budget. You may be surprised to find many hidden gems in a neighborhood you didn’t originally consider.
Market Trend #3: Mortgage Interest Rates will remain low
With the US still in economic recovery in 2021, we will continue to see the same real estate market trend of interest rates remain low. As the economy slowly improves due to more Americans receiving the COVID-19 vaccine, interest rates will remain low for the majority of 2021. This means that home sales will stay strong and competition will be low for sellers. Although the economy and cities are predicted to open back up as we move into 2021, most people want to stay home because they can. This means that people are in the market to buy homes, especially bigger homes with lower interest rates that fit their desired needs better.
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