If you were to rewind to the end of 2019, many housing predictions would tell you that things were looking up for 2020. Fast forward to March and the COVID-19 pandemic has hit the United States in full force. Since then, many real estate professionals have been unsure of what the housing market will look like due to the uncertainty of the pandemic itself. As things have slowly gotten back to normal though, many are beginning to speculate what 2021 will look like now. Here are a few up and coming housing trends to be on the lookout for.
Home Sales
Houses were selling like crazy prior to the pandemic due to lower mortgage rates, but when many businesses were shut down in order to slow the spread of the virus, most real estate transactions also stopped. Now, banks like Fannie Mae believe that home sales will fall by almost 15% by the end of the year, but that come 2021 things will get better. Other groups such as Zillow expect home sales to decline by over 50% from what they were prior to the pandemic, but will slowly recover over the course of 2021.
Open Houses Won’t Exist As They Were
Another trend that many predict is that realtors won’t be able to hold true open houses again for quite some time due to social distancing. Right now, most open houses are made by appointment so large groups of potential buyers don’t spawn. This means potential buyers are less likely to jump on bidding for the home due to not physically seeing their potential competition.
Home Prices Will Drop For Now
The general consensus is that as the year goes on, house prices will begin to fall. For example, Zillow believes that prices will drop by 2% – 3% come this fall and then slowly rise over the course of 2021. This can lead to the chance for real estate investors to buy rental properties for lower prices so they can have them when the market recovers to its pre-COVID-19 status. Prices won’t be astronomically low, but even 2% can be a significant chunk of change.
Housing Affordability Will Continue To Rise
Home affordability has already been slowly rising, but the pandemic seems to be quickly making the issue worse. While home prices will likely only change slightly, many people have lost their jobs or are stuck at home, meaning the average household income has dropped. With fewer people being able to afford homes, real estate investors will be able to take advantage of those looking for rental properties.