2020 was a rough year for millions of Americans due to unemployment, economic uncertainty, eviction and foreclosure moratoriums expiring. With that said, things could start looking up because COVID-19 vaccines have been released and have a 95% efficacy rate. Businesses and schools may start to reopen, people will feel safer to go out and about, and there may even be more people entering the market.
So, what kind changes will we see from the COVID-19 vaccine and the real estate market in 2021?
Metro area may see an increase in demand
One of the ways some companies have retained their workforce was by allowing those who could work from home to do so. Since people didn’t have to drive to the office everyday, some considered relocating to a less dense area to avoid the potential of getting sick.
However, the COVID vaccine could mean that businesses will reopen and the economy will soon start to recover. And those who left the big city in favor of the suburbs may rethink their decision and move back. Plus, there are some cities where the rent has decreased because of the pandemic and that may be another alluring tidbit to draw people back into the city.
Home sales will increase exponentially
Although many industries have been hit hard by the pandemic, the real estate industry proved just how resilient it is. There’s a lot of qualified buyers out there who are taking advantage of the current low mortgage rate. Home sales are expected to increase over the next year, which is good news for those who are thinking about selling amid COVID-19, as it’s a seller’s market in 92% of markets around the country.
Rent and home prices will increase
Since it’s a seller’s market, it’s understandable that sellers would increase their asking price because they know the market is hot and inventory is low. It’s even expected that buyers would even consider offering more than asking if they really love the property.
Landlords, on the other hand, may have felt the strain if tenants missed rent payments during the pandemic. It’s quite possible that landlords may decide to increase rent once the extended eviction moratorium ends on March 31st to recoup some of that loss.
Mortgage interest rates increase as economy improves
Buyers may be taking advantage of low interest rates now, but those rates aren’t going to be around forever. As vaccines are distributed and the rate of infection declines, the economy will start to recover. And, as the economy recovers, interest rates will increase to improve economic growth. The good news is that the Federal Reserve doesn’t plan to increase rates anytime soon, so we can continue to benefit from these low rates.
Also, homeowners who considered refinancing may want to do so now while rates are low. They could stand to save a good amount of money, especially if their initial rate was higher when they first began the mortgage!
If there’s one thing this pandemic has taught us is that the real estate industry is tough. There will always be a need for housing and real estate agents will always be prepared for whatever is thrown at them. As more vaccines make their way throughout the country, things can only get better.
If you’re thinking about entering the market any time soon, you can always reach out to your local real estate agency and ask for advice and tips from top agents to help navigate the market. They’ll be your best friend!