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2021 Housing Market Ready to Go Full Throttle on Heels of a Banner Year for Real Estate

Industries across the country have suffered to some degree because of the pandemic. Many businesses have had to close their doors for good, leaving millions of workers unemployed and struggling to keep their heads afloat. Real estate, interestingly enough, was not one of those industries. Sure, it experienced a bit of uncertainty and folks hesitated to buy or sell… But all in all, the market has proven just how resilient it can be - housing is a need, after all. In an effort to stay ahead of the game, real estate agents do their best to predict the market’s trajectory for the upcoming year. Here’s a look at how the market will be this year.

Low inventory

In an ideal market, there would always be enough houses to meet buyer demand and vice versa. However, many real estate agents are saying their market simply doesn’t have enough inventory to satisfy buyer demand - even with an increased interest in new construction homes! Agents worry there won’t be a significant increase in houses going on the market any time soon.

Vaccine distribution

When the COVID-19 pandemic hit, many people were engaged in real estate activity. However, we quickly saw sellers pull their houses off the market and buyers’ activity decrease. Many folks decided to put their plans on hold until the pandemic had subsided. Now, we are seeing buyers enter the market with gusto, thanks to the distribution of the COVID-19 vaccine and real estate activity picking up. It’s safe to say the market is going to be very busy throughout 2021.

Evictions and mortgage forbearance

On his first day, President Biden signed an executive order to extend the eviction and foreclosure moratorium, which will help people from losing their housing. However, this isn’t going to last very long and once we hit the March 31st deadline, the market could see a huge wave of homelessness if people don’t receive help.

Low interest rates

National mortgage rates are still incredibly low and buyers are taking notice. These rates are the primary reason real estate agents are seeing a surge of qualified buyers entering the market. As great as this is, it’s important to note that this isn’t going to last forever and agents predict that once the economy improves and more people get the vaccine, interest rates are going to go up.

Relocation

Remote work is expected to become a permanent policy for many businesses and real estate agents are expecting people to leave the city (there’s no need to drive into the office anymore) and go to quieter, more affordable areas like the suburbs.

Preparedness

The real estate market is very much an in-person industry and you can imagine the challenges real estate agents have had to overcome in order to keep business going. Luckily, we live in a technology-based age and agents have tools that allow them to provide their services without compromising anyone’s safety. They’re using video conferencing, 3D and virtual tours, and digital closings to complete their transactions. With these tools in their arsenal, you can bet they’ll be ready for whatever is thrown at them in the future.

$15,000 tax credit

President Biden has proposed to extend the Recovery Act so that first-time buyers can access the $15,000 tax credit when they need it for the down payment instead of waiting to be able to claim it on their taxes the following year. This could be a big help for first-time buyers because it’s pretty darn hard saving the ideal 20% of the purchase price for a down payment!

Although predictions are never set in stone, it’s always nice to have some tips from top agents regarding the future of the market. With their insight, you can set yourself up for success in 2021!

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