2020 was predicted to be a good year for real estate in the US but as the year went on, prices dropped. In addition to this, forecasters predicted a sluggish market throughout the rest of the year as the volume of sales dropped and deal times got longer.
But, as we move into the last quarter of the year and start to look ahead to 2021, housing and economic experts have issued more positive outlooks for the next year. While things may not be completely back on track, it seems there could be several good opportunities for real estate investors and first-time buyers.
According to Freddie Mac, house prices across the country may drop very slightly during the first quarters of the year but should pick up from Q3 onwards. Luckily any dip is expected to be small due to various stimulus packages implemented and due to be implemented by the government. This, they say will act as a buffer for any economic shock and negative impact on house prices. Zillow had a slightly gloomier outlook but again, they predict that prices will drop in the first half of the year, but that recovery will come by late summer 2021.
For investors, this means that the first six months of the year could provide at least favorable opportunities for purchasing a residential property.
The average annual mortgage rate for a 30-year fixed-rate mortgage was 3.1 this year. Various analysts, lenders, and industry stakeholders have said they expect rates to decrease during 2021. This is good news for those looking to finance a real estate purchase. Low property prices and favorable mortgage rates mean that many could get more bang for their buck during this period.
To see what this means in terms of lending conditions, rates, and fees, potential buyers typically visit mortgage deals comparison sites like Trussle. There, they can compare a range of different products on offer from leading lenders. By comparing the deals side by side, they can build a comprehensive picture of what suits their means and who has the best offer for their circumstances. During 2021 as the property market starts to pick up, sites like this provide valuable assistance for those considering buying.
Supply and Demand
So far this year, the supply of homes on the market has dropped as sellers pulled their listings during the first half of the year. As we move into the last few months, many are hesitant to put them back on the market and are holding out for better conditions.
Some have said that this reduction could be mitigated by those forced to sell up due to difficult economic conditions, but it remains to be seen whether this will materialize. Most market predictions for the upcoming year forecast that low supply will continue, meaning some buyers may struggle to find a property within their budget.
Location, location, location
This year has seen a change in the types of properties people are buying. Some of those living in cities have chosen to sell up and move to the countryside, leaving an abundance of city real estate available. With low prices and empty units, there are plenty of deals to be had. For example, in Manhattan, apartments saw the biggest drop in value for over 10 years at almost 20%.
Of course, these are just predictions and during such uncertain times, it is difficult to know what will happen in the coming weeks or months. That said, there will always be opportunities for great deals depending on what kind of real estate investment you’re after.