What will happen to house prices in 2021? This was a common question that real estate players asked as the year began after a slow-moving 2020 due to the COVID-19 pandemic. As of April this year, U.S home sales and prices have continued to rise. As a result, both homebuyers and sellers are anxious about the current home market trends and most of them are wondering how long it’s going to last.
The truth of the matter is, the current surge of the real estate market is not similar to the famous 2008 housing crisis bubble. Today’s home sellers’ market is as a result of diverse COVID-19 pandemic forces which have dealt a big blow to the entire economy and social life.
As the government continues to intensify its efforts of taming the spread of Coronavirus and implementing economic recovery programs, we are going to see a reorganization of buyers/sellers’ priorities in different real estate markets.
The current U.S housing market trends can only be maintained for a longer period if we are going to experience an increase in mortgage rates as the economy recovers and low inventory in some major markets.
When the real estate market was hit by the COVID-19 pandemic, we started to see a surge in demand for homes in suburban markets as most Americans moved to less populated areas. However, in the current market, housing prices in cities are also rising exponentially indicating a change in homebuyers’ tastes and preferences.
The pandemic affected different markets in different ways. In New York City, for instance, we witnessed a drop in demand for both commercial and residential properties as more people moved to more affordable suburbs. However, the situation is changing now as we can see the demand for houses grow in the first quarter of 2021.
The current high home prices in major markets are expected to continue growing in the coming months although the sales are expected to take a slight dip in the fourth quarter of 2021 since there will be more inventory.
What makes the current situation a seller’s market?
A seller’s market favors the home seller since there is low inventory compared to the increasing buyer demand. We are witnessing home prices skyrocketing to a record high compared to a similar period last year. Home sellers are also receiving multiple bids since there are fewer listings to choose from.
As a result, sellers are getting multiple better offers and their homes are selling more quickly than before. Homeowners should list their homes now and reap the benefits now that there is a thin inventory because the coming months are not fully predictable.
What does the current housing market mean to buyers?
For homebuyers wishing to purchase homes in April 2021 and in the coming months, stiff competition will be the name of the game. Prospective homebuyers will be forced to offer more than just the asking price since home sellers will receive multiple offers.
We are going to see more buyers agreeing to waive contingencies to reduce the time they will take before they can close a sale. As the mortgage interest rates continue to rise, homeownership will become more expensive going forward. Therefore, the best time to own your dream home is now before the rates are increased.
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