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Whether you are thinking about buying or selling a home this upcoming year, it is crucial to understand both the current and the projected states of the housing market. Thus, here are a few housing market trends to keep an eye on for Spring 2021.
At the onset of the global pandemic, home sales in the spring of 2020 were dismal at best. This was obviously concerning since spring is usually considered the hottest season for real estate. But the good news was things did not stay that way for long, and the housing market was able to make an impressive rebound. In fact, real estate experts reported that the surge in home sales at the end of 2020 made up for the spring market losses.
So, what does that mean for spring 2021? Will we see similar results? How will the housing market shakeout in our current economic climate? Well, regardless of whether you are selling, buying, or staying put, here are the 2021 real estate trends you can expect this spring.
According to Zillow, the spring housing market will be a perfect storm with an increase in home sales, which will happen fast, and at above listing prices. The reason these market conditions are likely is because the COVID-19 vaccine, if things go according to plan, will be more widely distributed, and local economies will be in the process of reopening. As a result, people are expected to have more job security and certainty about performing their jobs remotely.
There is also likely to be an influx of people moving back into the city. This will likely be more prevalent with individuals that moved in with relatives to save money and who are looking to take advantage of low predicted rental rates or rent concessions.
Yet another interesting trend experts are forecasting is that this spring will be the last of its kind. In other words, the pandemic taught us how to buy a home virtually, and opting for online lenders helped to speed up the entire home buying process. Thus, many analysts believe that after spring 2021, any season will be the best time to buy or sell your home.
Speaking of selling your home, Zillow is forecasting 21.9 percent annual growth for a total of 6.9 million homes sold– the biggest annual sales growth since 1983. The optimistic outlook is partly thanks to the enduring strength of the current market. What has typically been a slower season for home sales, coupled with demographic factors, clearly indicates that demand will remain strong for some time. Plus, last year’s data indicated that about a third of homeowners considering selling in the next three years cited life and financial uncertainty as reasons they were not selling in the latter half of 2020. Thus, once again, the COVID-19 vaccine rollout and expected subsequent economic recovery is poised to pull many reluctant sellers off the sidelines, adding more inventory to meet the heavy demand for homes—all of which will lead to more residential real estate transactions.
What’s more, an increase in builder confidence and residential building permits towards the end of 2020 translated into an uptick in new residential construction. As a result, there will definitely be newly built homes on the market come spring. The good news here is that having access to more inventory will help spur things along. However, there will likely not be enough inventory to meet the ever-increasing demand for homes. Thus, to no one’s surprise, a continued seller’s market during springtime and the remainder of 2021 is almost a guarantee.
Overall, more real estate transactions, local economies opening up, and a more inclusive vaccine rollout ultimately mean that the speculated housing market crash or recession in 2021 is very unlikely. Clearly, there is no denying that the initial impact of COVID-19 cast a large shadow of uncertainty over the housing market. But as time progressed, we definitely saw a gradual improvement, especially in the wake of more favorable interest rates, which boosted home buyer confidence. Even now, with yet another spike in COVID-19 cases, the most negative impact appears to be a short-term decline in rental properties, which is currently reentering a period of steady recovery.
In the event of rapid price growth and slightly higher mortgage rates, more than a few home buyers may have trouble affording their dream home later this year. At present, home prices are steadily climbing, and mortgage rates are still hovering around 3 percent. Therefore, making a move now or in early spring might be the best decision for buyers, especially those looking to purchase their first home.
Given the expected number of sales, hopes for an economic recovery, and the expectations for demand to still outpace supply, Zillow forecasts annual home value growth to reach 10.3 percent starting in the late fall of 2021. Moreover, mortgage rates will likely not stay this low forever and are, in fact, expected to rise. That said, rates are still projected to be lower than they have been in quite some time, particularly in the springtime. But later this year, this could easily change, which would likely have an impact on buyers’ monthly payments.
Ultimately, these are just a few major spring 2021 housing market trends to be mindful of when considering a home purchase or sale.
Are you curious about mortgages, or are you ready to apply for one to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Contact us today with any questions you have about mortgages.
Analysts discuss the latest readings on public and private sector jobs, the national unemployment rate, plus weekly readings on mortgage rates and jobless claims.
Summary: The national response to the COVID-19 outbreak has driven mortgage interest rates to record lows. States are making every effort to keep the real estate transactions moving along. Home owners should refinance if the savings are significant and their…