Deemed the “year of extremes and challenges that we never could have imagined,” by Ohio Real Title President, Ryan Marrie, 2020 has impacted pretty much every aspect of our lives. And the real estate industry is no different. What is different is how the pandemic has impacted the residential housing industry.
After the housing market briefly hit pause in the Spring of 2020 due to the uncertainty wrought by the global pandemic and wide-spread stay-at-home orders, it turned into a record-breaking year and a pillar of the economy. Unlike 2008 when much of the Great Recession was blamed on the real estate market, it is currently one of the industries that are remaining the strongest during these uncertain times.
As we head into 2021, many experts believe that the market is set up for another strong year, especially if the new supply of housing continues to improve. Let’s take a look at some of the real estate trends that the experts expect to see this year:
Mortgage rates are expected to remain low
In the first week of 2021, mortgage rates again hit a new record low. And according to some industry experts, rates are expected to rise only modestly in 2021, with some expecting that they will continue to hover around 3%. Assuming rates stay as expected, they will help to keep homebuyers active, and more and more borrowers may opt to refinance to reduce monthly mortgage payments.
Available housing inventory will increase
Home sales have stayed strong throughout the late fall and into the winter. There is not only a demand for housing, but the supply of new listings also has reached the highest point since the onset of the pandemic in some parts of the country. As the uncertainties begin to lift, home supply will continue to increase and price appreciation will begin to slow.
Second homes will grow in popularity
With people vacationing differently, with an emphasis on privacy and cleanliness, expect to see an increase in home buyers purchasing second homes. In addition to providing a sense of security, vacation homes in a managed community may offer real potential for rental income that can offset ownership expenses.
Home buying and selling will stay online
Driven by safety concerns brought on by the global pandemic, the real estate industry as a whole saw the adoption of new technologies that have made buying, selling, renting, and financing both safer and easier. This shift in operations is likely to stay, with consumers demanding a digital-first experience throughout 2021, and likely beyond.