2020 was a historic, hard year for America. A 100-year pandemic, racial and political unrest, economic bloodbath as millions lost their jobs and businesses vanished without a trace, and it ended with a once-every-thousand-year ‘Great Conjunction’ where Jupiter and Saturn crossed paths – said to be what happened the night Jesus was born.
While that was certainly the brightest point capping off one of the most life-changing years in American history, there was also a bright spot on the ground – the real estate market.
While America learned to ‘socially distance’ and stop forgetting to mask up before going into buildings, home sales soared after temporarily halting at the start of the pandemic. The FED lowered mortgage rates and since there was a shortage of houses on the market throughout 2020, housing prices rose. This was great for sellers.
Still, according to Black Knight, a mortgage data and technology company, 2.7 million, or a total of 5.2% of mortgages, are in forbearance. That means a total of $547 billion in unpaid principal.
So then, what can we expect for the year 2021?
Mike Miedler, CEO of Century 21 Real Estate, predicts this year could be the best year ever. He reports that he’s been seeing a really hot real estate market. Miedler says that they have only got about two and a half months supply of inventory where they normally have about six months of supply.
When talking with one of Century 21’s Dallas based broker’s, this broker reported that they had 100 families that viewed a single home in just one weekend!
What are the reasons for this shortage of inventory and high demand?
Miedler points to what the home has now become. Home office; home school; hideout from the virus; and more, has really put the meaning back in the adage ‘the home is where the heart is.’
Millennials made up 38% of the buyers in 2020, according to the National Association of Realtors.
Miedler and other real estate experts believe that the trend will continue throughout the year of 2021 as pent-up demand for housing snatches up the supply of single-family houses that come on the market. Another NAR report suggests that mortgage rates will rise along with housing prices so buyers may face more affordability challenges as the year progresses.
NAR chief economist Lawrence Yun predicts new-home sales will jump 21 percent and existing-home sales will climb 9 percent in 2021. He predicts home prices will rise by 3 percent in 2021.
Still, to combat the affordability issue, more good news. In-coming president Joe Biden has proposed a home-buyer tax credit of $15,000 to incentivize more first-time home buyer sales. Let’s all keep our fingers crossed that this juicy incentive comes through.
Whether you’re looking to jump in the exciting game of property flipping or you’re a veteran real estate investor looking to invest in the Baltimore, Maryland area, you shouldn’t make a single move without first talking with the experts of Utz Property Management.
Utz PM specializes in helping real estate investors find, renovate, sell, and landlord real estate in the Maryland area.
If you want help finding, rehabbing and managing properties, don’t wait, schedule a free turnkey discovery session with Jenni Utz today.
Or, you may contact Utz Property Management today at 410.332.4432.