Even though 2020 was economically gloomy, there might be light at the end of the tunnel in the housing market. Thanks to the low mortgage rates and a significantly low number of homes in the market, there has been an upsurge in prices. Consequently, this has increased the value of homes.
This sudden surge of property sales might have compensated for the slow spring season, but what are the prospects of real estate market trends in 2021?
According to experts, this surge is expected to spill over to 2021. The demand is from homeowners in need of bigger spaces to accommodate home offices and study areas, condo owners looking for single-family units, and buyers who delayed purchasing homes during the epidemic. Also, the ability to make virtual house tours and complete purchases online simplifies the buying process.
As we’ve mentioned, the end of 2020 witnessed an increase in property prices by a neat 15%. This trend is expected to carry forward into 2021. This might be good news for homeowners and sellers, but it also means that housing affordability will continue to decline. If housing supplies do not increase significantly during the year, it might limit future homeownership.
Mortgage Rates Remain Super Low
2020 was characterized by pleasantly low mortgage rates. Economists predict these rates will remain at 3%, which will boost affordability in the property industry. As a buyer, this might pressure you into purchasing a home. Keep in mind that if you can’t afford a house, low-interest rates don’t make it a good deal. Should rates start to surge, keep your property on listings for a while longer if you’re planning to sell?
Growth of the Online Real Estate Platforms
No doubt that there exist online platforms that allow you to list or browse property on sale. However, 2020 saw the growth of online real estate services such as Opendoor and Zillow that offer to sell and buy property for you.
Other platforms such as Redfin offer virtual agents, meaning you enjoy the services of a traditional agent but at a significantly lower cost.
Online notarization and electronic signature apps have simplified the online task of virtually handling documents. It makes it possible to make a closing from the comfort of your home or office.
Accessibility of Riskier Buying Options
According to Brisbane National Property Buyers, the property buyers advocate in Brisbane, there is an increasing curiosity in more creative ways to own property. You are advised to take caution and seek the advice of a property buyers advocate in the area you live in. Popular trends include rent-to-own agreements and loans for down payments.
The rent-to-own agreement allows you to rent a property for a specified timeframe before you can own it. The perks of such an arrangement are that you don’t have to qualify for a mortgage or save up for a down payment.
On the other hand, this means that your rent is more costly because part of it goes toward homeownership. Also, changing your mind about ownership does not mean your extra payments will be reimbursed. Another downside is that you’ll be expected to take care of repairs and maintenance.