The real estate market has been a rare bastion of hope during the era of COVID-19. As this pandemic nears an end, sales and home prices have been surp...
The real estate market has been a rare bastion of hope during the era of COVID-19. As this pandemic nears an end, sales and home prices have been surprisingly upbeat with the former not slowing down and the latter favoring sellers.
That is, whether looking to buy or sell, you have opportunities, and those will continue to exist even as the challenges of a post-pandemic market emerge. In the following article, we look at both. Let’s begin!
Opportunity: Low Mortgage Rates
There will still be ample opportunity to sell your house fast during the coming post-pandemic time period. Much of this will be thanks to the low mortgage interest rates that are expected to linger a bit after vaccinations have become widespread.
Rates have fallen to 30-year lows at around 2 percent, which is relatively unheard of in the history of the real estate market. Those won’t skyrocket overnight, so it will remain a good time to buy and sell as a result.
Challenge: Less Inventory
The real estate market is somewhat limited in its ability to meet buyer interests over the long term. That’s because, in many parts of the country, new home inventory has slowed. Demand will eventually catch up to production resulting in fewer empty houses to serve buyers.
One of the real estate market trends that are very advantageous for both buyers and sellers is the newfound ability to work from home. Millions of workers found out they could do their jobs from their living rooms, and so did their companies!
The ability to work from anywhere, essentially, makes one more confident to test new real estate markets, particularly cheaper areas, where the gainfully employed can enjoy more house for less money.
Challenge: Rising Prices
One thing many realtor pros are noticing already is the rise in home prices across the board. This is a rare time when it’s both a buyer’s and seller’s market. It fits the bill on both counts because of both the aforementioned low-interest rates (buyer) and the ability to raise prices to meet that demand (seller).
In other words, buyers can afford more expensive homes because they’re paying less interest. That’s a win-win for now, but it will eventually test the limits for buyers as interest rates come back.
Opportunity: Single-Family Homes
Those who want to buy a house are going to find some great deals in the small- to the mid-sized single-family housing market. Many buyers who might have found themselves distressed by the pandemic could also be willing to take less for their homes to get out from under the debt obligation as they look to improve earnings.
Challenge: Job Confidence
The ability to sell a house quickly might be tarnished somewhat by sluggish job prospects. The American economy has yet to come back from where it was before the pandemic, and it’s not likely to improve as quickly as it deteriorated.
People worried about their work situation are going to be gunshy about entering into 15- or 30-year mortgage agreements until they feel stable again. Also, it’s worth noting here that feeling stable doesn’t simply mean having a job. It means having enough for a downpayment and the ability to manage monthly payments that aren’t a significant portion of income.
Trust the Real Estate Market
Investing in the real estate market is still one of the surest ways to protect your money and grow your net worth. That won’t change in uncertain times.
To make the most of it, though, you will want to pay attention to the opportunities and challenges we’ve mentioned here and take the right steps at the right time. Best of luck! For more real estate tips and advice, check out some of our additional posts!