Today’s post comes courtesy of Mackenzie Kirk at HomeLight. If you’re looking ahead to 2021, Mackenzie has a few market insights for you.
Housing Market Predictions for 2021: Will Real Estate Be the Same?
Residents in the United States are starting to adapt to what is known as a “new normal” due to the effects that COVID-19 has brought to the table. This includes social distancing, staying home, taking plenty of precautions, and wearing face masks in public places. Additionally, the amount of people who have been financially affected continues to grow every day as unemployment numbers rise. What does this mean for those who wanted to sell their house or purchase one?
Right now, the real estate market is pushing forward, but not as fast as predicted at the beginning of the year. Clearly, the next few months are going to remain drastically different, but what about 2021? Here is some insight.
What is happening now?
Right now, much of the country is still under lock-down. Though states are slowly reopening, governments are still urging people to stay at home and to avoid gatherings. It’s tricky to make housing market predictions for 2021 due to the sheer uncertainty surrounding the virus, but we can say that next year’s trends will be somewhat influenced by what’s going on now. The economy has taken a major hit, and many have lost their jobs.
In March, the housing market was 8.5% lower in sales compared to February, and economists predict it to get even lower in the next few months.
What will the economy look like?
The economy has taken a hit, and many experts fear the onset of a recession. In 2008, the recession was tied heavily to the real estate market because of its origins in the mortgage industry. But this time around, it’s much different. While the current state of the economy will still affect how people buy and sell houses, the behavior of those involved will be different. Fewer overall sales is how a recession can affect the housing market, but the addition of the pandemic can make it even more tricky. It’s hard to tell what the economy will look like in the next few months, but the rising number of unemployment claims show that we will still see the effects of the virus in 2021.
Is real estate safe?
Real estate is among the safest long-term investments available. Even if the market dips during a recession, it will always come back.
From a health standpoint, there are ways to conduct real estate transactions while also practicing social distancing. During the process, opt for virtual showings and remote courses of action wherever possible. Look into your local government restrictions.
How do I prepare?
One of the best ways to prepare for any recession is to build a recession-proof income stream (or two). This way, if your primary income stream is impacted by the market, you’ll still have cash coming in.
Then it’s just a matter of stay up-to-date with the economy, interest rates, and best health practices. We hope that you stay positive and safe during these trying times.
