Covid 19 has hit the refresh button in many industries, but none more than the real estate market. The ability to move cities, buyers’ purchasing power, and housing costs have all experienced notable changes. As such, real estate investors, prospective homeowners, and investors are researching real estate market trends in preparation to invest.
A Drop in the Need for Residential Real Estate
As the world shifts to a sense of normalcy, working from the offices resumes, and people are finally chasing different activities. Consequently, the expectation is there will be less need or rush when it comes to purchasing residential real estate.
People moved away from urban metropolitan areas during the pandemic to escape the chaos for reclusive safe spaces. Expect this trend to ultimately subside in the coming year as solid cities reclaim their glory. Second-home markets purchases that were on the rise during the pandemic are also expected to fall.
A Rise in Home Prices
The pandemic hastened the expected slow rise of house prices in the coming years. The sharp increase in these prices is attributed to the decrease in buyers’ spending abilities. Even with the market currently experiencing low mortgage rates, house prices may increase up to 10.5% in 2021.
The rise in home prices has also led to an increase in homes on sales. Such changes triggered by Covid-19 may lead to governments creating policies to help manage the real estate market in case of future outbreaks.
Low Interest and Mortgage Rates
The year 2021 has seen the Federal Reserve lower interest rates to nearly zero, which may last until 2022. Low interest and mortgage rates mean it’s a great time to invest in real estate. Why? because it’s more affordable, especially with an investment loan or a mortgage.
Real Estate Market Will Appreciate
Contrary to popular belief or theories, the real estate market will appreciate in late 2021 and 2022. The appreciation will be a result of the housing shortage, increased house importance, and high demand.
The real estate market is currently experiencing a shortage of houses in its millions. As a result, available housing units will be more valuable than ever.
In addition, more homebuyers are coming of age(millennials), meaning a boom in housing demand in the coming year. All these factors together will see the real estate market appreciate.