This is a guest blog post by Evette Zalvino, a writer for HomeLight.com, a website that empowers people to achieve better outcomes when buying or selling a home.
Last year was difficult for millions of people in this country, due to rampant unemployment, an uncontained virus, an economic downturn, and the very real chance of experiencing homelessness. As bleak as 2020 was, the future is starting to look a little brighter, thanks to the release of COVID-19 vaccines that have an efficacy rate of 95%.
This good news is proving to be the boost needed to return to some semblance of normalcy. The COVID-19 vaccine and the real estate market’s future go hand-in-hand. Here are a few ways real estate agents predict the vaccine will alter the housing market in 2021.
Interest in the Metro Area Will Increase
During a time when businesses are laying people off or letting them go permanently due to closures, one of the ways companies have adapted is by letting people work from home if they can. Remote work has allowed businesses to retain their workforce and keep their businesses running as “normally” as possible.
While it’s true that working remotely on a permanent basis could be a reason for people to consider moving outside of the city, real estate agents in metro areas believe people will return to the city as businesses reopen. There are even some cities where rent prices have decreased due to the pandemic and people moving away.
Houses will sell quicker than ever
The real estate industry is resilient, especially for people who have put off buying or selling during the height of the pandemic. With interest rates at or near historic lows, buyers are flocking to the market in an effort to take advantage of those rates.
On the flip side, 92% of the real estate markets around the nation are strong seller’s markets because there are far more buyers than houses available. This is especially true in Texas' housing market, which remains one of the hottest in the nation.
It’s going to be more expensive to rent or buy
The challenge of a strong seller’s market is that sellers continue to increase listing prices. And even if sellers don’t ask for more, buyers are making offers above asking prices and engaging in bidding wars, both of which lead to higher home sales prices.
Unfortunately, while this situation may be a boon for sellers, landlords face a different challenge. With the eviction moratorium currently slated to end on June 30th, some landlords may be hurting. In the absence of any relief, they may increase rents to recoup losses sustained over the past year.
As the economy improves, say bye-bye to low mortgage rates
Mortgage interest rates may be at an all-time low, but once the nation gets vaccinated and the economy improves, you will probably see interest rates rise again. If you can buy, you may not want to wait too long because even a 1% increase in the interest rate could cost you tens of thousands over the life of the loan.
The vaccine is a beacon of hope for the nation, and experts anticipate an improving economy will strengthen the real estate market. If you need to find actionable tips for a quick home sale, you’ll want to reach out to your local real estate agent for help.
On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.