The COVID-19 pandemic turned life upside down in ways both big and small. But despite all the disruption, the housing market has remained relatively stable. After a brief downturn in home sales at the start of the pandemic, mortgage rates remain near historic lows and buyers in many markets seem undeterred by the economic downturn as home sales rebounded and remain strong. But that doesn’t mean the real estate world has been completely unaffected. To help you make the most informed decision possible when buying or selling a home, here are some 2020 home buying trends as well as a forecast for what the market may look like in 2021.
Suburbs Growing in Popularity
The suburbs have always been attractive to those who prefer the comforts of city living without all the hustle and bustle. But the pandemic has many people rethinking how closely they want to live to other people, and today’s home buying trend is a renewed interest in suburban homes. Mortgage applications for homes in the suburbs have been increasing significantly since the start of the pandemic. For example, in the areas outside Chicago and Washington, D.C., “suburban or rural mortgage applications are up 40% versus pre-pandemic averages.” Searches for suburban homes were also up 13% in May, according to Sanjiv Das of Caliber Home Loans as more people are taking health concerns into account during their home buying journey. Suburban homes also tend to offer more space than homes in the heart of the city. Which leads to the next big home buying trend of 2020.
Home Office Space is Critical
More than ever, home buyers are looking for properties that have enough space so they can work from home. Home offices used to be considered a bonus, but with COVID-19 changing the way many people “commute” to work, extra office space has become a definite home buying trend. If you’re looking to buy a home, consider the amount of space you’ll need to live and work comfortably. If you’re trying to sell your house, consider staging your home to feature dedicated work spaces so you can entice buyers and help them envision themselves living in your house.
Energy Efficiency Becoming a Bigger Priority
If you’ve been working from home or just spending a lot more time at home in general, you may have noticed a bump in your utility bills. You’re not alone, and this phenomenon is playing out in the housing market as people put more emphasis on homes that are energy efficient. So if you’re getting your house ready to sell, consider making small improvements that boost energy efficiency and be sure to highlight those upgrades during any home tours.
Looking Ahead to the 2021 Real Estate Market
Before we go any further, we should point out that there is no single housing market. Home buying trends emphasize behaviors that are more common. They are not the norm in all markets. Market conditions can vary wildly from city to city and state to state. So, you should always check with a local real estate agent to get the latest information for your area. That said, experts are already starting to develop some big picture ideas about the overall state of the housing market in 2021.
The consensus among many industry insiders is that home prices will continue to grow, albeit at a much slower pace, and may even start to fall in some markets. Experts say the main factors driving high prices pre-pandemic — namely, increased demand and lack of supply — haven’t changed due to the crisis, which will keep prices high for the foreseeable future. However, they say that markets like Las Vegas, where tourism is a major driver of the local economy, could see a significant fall in home prices as those markets struggle to cope with the economic fallout of the pandemic.
Mortgage rates are also expected to remain low for at least the short term as the government looks to spur economic growth and recovery. Although experts agree that it can be difficult to project too far into the future during a time of such uncertainty and economic upheaval.
The housing market has largely been a welcome bright spot during a time of significant change and economic hardship for so many. So, whether you’re looking to buy or sell a home, just be sure to do your homework and consult with local experts who can provide the best guidance for your unique situation.
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