We all couldn’t wait to bid farewell to 2020 and the challenges left in its wake, but, unfortunately, 2021 still has a hangover – and we’re seeing some of those challenges in the real estate industry as well.
While home sales soared in late 2020 after a sluggish spring market, we’re still digging through the obstacles and trends in buying homes, selling homes and real estate in general. Here’s what you need to know for 2021 – the good and the bad.
Higher Listing Prices
The national home median price is more than $300,000, which is an impressive 15 percent higher than last year. For buyers, you’ll have to do the research to find out the kind of house you can afford on your budget. It’s suggested to limit your mortgage payment to 25 percent of your monthly pay and to save at least a 10-20 percent down payment. For sellers, when you work with an experienced real estate agent, you could get just the right offer and a nice profit. You have the upper hand.
Shortage of Homes for Buyers
As you can imagine, because home sales are at an all-time high, the inventory is extremely low. It was down 22 percent in November 2020 from the previous year. For buyers, that means you have to act fast, because most homes tend to be on the market for less than a month. It will help to get preapproved for a mortgage before you go house hunting to speed up the process and to slim down your “wants” list, i.e., be open minded, with a plan to upgrade a less expensive home later. For sellers, the shortage is an advantage! You’ll have far less competition and more freedom to pick an offer that’s best for you.
Lower Mortgage Interest Rates
Buyers can rejoice in an ultimate low mortgage interest rate; the average in November 2020 for a 15-year fixed rate dropped to a glorious 2.31 percent, the lowest in 30 years, which should continue to be close to that in 2021. The result of low interest rates is an increased motivation for buyers to buy homes … now.
Rent-to-Own Buying Option
There seems to be an increase in some riskier buying options during this time, like rent-to-own. The positive: it gives buyers the time (a few months to a few years) to save for a down payment and qualify for a mortgage. The negative: rent could be more expensive because some of your monthly payment will go toward potential homeownership and you may have to handle all the repairs and home maintenance. And, if you decide you don’t want to buy the home after all, you wasted all of those extra payments.
More Robust Online Real Estate Presence
Digital technology is now making it easier to process mobile or online closings virtually. There is a suite of convenient electronic signature apps and remote notarization services, so you can socially distant from the comfort of your home.
If you’re considering a real estate purchase or sale, or if you’re interested in buying a home in one of our new home developments, we’re here for you! Visit us at http://www.sands-realty.com/, email us at info@sands-realty.com or call us at 843-839-4878.
