Why are real estate markets so hot right now despite COVID times?
Remember those pre-COVID times when things were a lot less complicated and stressful? 2020 has been a wild ride for many of us, but that means 2021 can only get better. With vaccine rollouts increasing steadily and the job market recovering smoothly, 2021 has already started looking brighter, and one thing we can all look forward to this year is another solid real estate market.
In 2020, the already tight inventory got even tighter as demands for new construction and renovated existing-homes remained high, which resulted in a dip in affordability. The national median of new construction homes sold last year was $334,000. Overall, house prices in 2020 experienced a 9.4% spike, spurring many to sell their homes during the pandemic to capitalize on the high prices and demand. 2020 was also the year of buyer’s remorse. It’s one thing that you now have a 10 year supply of toilet paper, but it’s another when it’s a $400,000 house. Because inventory was tight, bidding wars made many homebuyers overeager, and many opted to skip inspections or add an extra couple thousand just to outbid the competition. Unfortunately, unlike clothes and jewelry, you can’t return a house (maybe that’ll become a thing soon).
It’s still a good time to sell your home
If it’s any consolation for those of you stuck with (home) buyer’s remorse, it’s still a seller’s market. Experts, including our own company president William Dickson, have positive expectations for this year’s housing market. As some companies move towards more long-term work-from-home solutions, many of their employees are searching for new homes. They are looking for upgraded work areas or larger backyards and in areas with lower costs of living than the metropolitan areas they previously worked in. Low-interest rates have offered some compensation for the high prices, allowing homebuyers to afford more house than before. These low rates will continue to offer a strong incentive for homebuyers this year. A large number of buyers this year may also come from those who may have held off selling their homes last year due to the pandemic. As we move into the warmer months, we may see some relief in inventory as more listings pop up, following what we typically see every year.
Our hottest real estate markets in the country have also been centered around the Sun Belt region, such as Atlanta and Jacksonville, as many flood to sunnier weather and more affordable options near metropolitan areas and strong job opportunities.
What’s different about purchasing a home in 2021?
You can expect more virtual buying options, and these options will likely stay even after the pandemic. Who doesn’t like shopping from the comfort of their couch and in those cozy PJs? Although virtual tours and video technologies have allowed us to shop for houses while social distancing at home, complete your otherwise normal process to make sure there are no hidden surprises in your new home when you move in. (Do not skip those inspections!)
With the limited inventory on existing homes, many are turning to new construction homes, which also offer more customization on certain features to fit the homebuyer’s needs. Despite the recent boom in new construction, inventory is still struggling to keep up with demand. Processes may be taking longer than normal to put you in your new construction home but this is the perfect time to explore your options and think about what you want in your next home. Trust us, a $400,000 house is one buyer’s remorse you don’t want to end up with.
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