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No matter where you live in the United States, the real estate market has taken a massive turn in 2020 due to the coronavirus pandemic. Both residential and commercial properties have been and will continue to be affected by these trends, so learning about them now will help you prepare to either sell or buy in the upcoming year. The nation will see the impact of COVID-19 on housing and commercial real estate for years to come, so staying informed and choosing the right time to act is imperative to getting the greatest value.
Great Deals on Rentals
U.S. cities are seeing major drops in their population as people flee urban life in search of a safer, more distant living in the outskirts. Others have been forced to move for lower costs of living due to economic hardship and job loss. Cities in the Midwest have seen the greatest decline in growth, but major cities like New York and Chicago are also experiencing loss. As a result, there are many great deals on rent that you can take advantage of if you’re interested in living in a metropolitan area.
The biggest concern is, naturally, what will happen to people who live in a city if the coronavirus continues to spread at such a rapid pace. The low rent prices will also not likely stay that way, with the majority being offered as move-in specials and ending at the end of the lease. You can then either choose to renew for what could be a substantially higher price or look elsewhere.
More Sales in the Suburbs
While people are looking to move outside of the city, this also means there is a slow but steady increase in the average house cost. Currently, it stands at $320,000. A 15-year, fixed-rate mortgage would require at least 10 percent down, so buyers must be mindful of whether they can truly afford to invest in a home. The more money you put down, the lower your mortgage will be, but as the average cost of living increases and suburbs become more sought-after, the market will become more competitive and prices may inflate drastically in certain neighborhoods as a result.
From a buyer’s perspective, the renewed interest in suburban living can lead to a generous profit on their home sale. Property may be able to be negotiated for a higher return on investment than it would have a year ago; working with an agent who can negotiate the best deal is crucial as many buyers might attempt to offer a low price in a competitive market. You can seal a deal early while still walking away with a decent amount of money if you have the right professional running the operation.
More Foreclosures
A wave of zombie foreclosures is anticipated to sweep through the U.S. throughout 2021. Throughout the spring, thousands of Americans filed for foreclosure or had to surrender their homes as mortgage relief programs ended. Because owners cannot afford to remain in many of these properties, there is likely going to be an increased number of homes left abandoned throughout the foreclosure process, and the highest rate of zombie homes could hit the Midwest and southern states. If you’re interested in purchasing a foreclosed home, consider looking at the foreclosed properties market in Dallas, TX and its surrounding neighborhoods. Dallas, TX has a variety of single-family homes with sprawling yards and updated amenities that could be ideal for people looking to scale up their living space without having to spend a fortune.
Lower Mortgages
Due to the pandemic’s impact on the economy, mortgage rates are currently the lowest they’ve been in almost a decade. This will likely remain for the entirety of 2021, which means it’s a prime time to explore homes and secure a fixed-rate mortgage. Although there is a reduction in price for buyers, there is also an influx of homeowners requesting refinanced mortgages from lenders, so this could prevent the interest rates from dropping any lower.
For buyers, it’s best to avoid any adjustable-rate home loans at this time. Because the market is likely to fluctuate substantially as the economy changes and, hopefully, rebounds, this could result in an unmanageable mortgage later on. Fixed-rate mortgages are always a better deal when the interest rates are low, especially as the median home price continues to rise. If you buy with the intent of selling in a few years, you could likely pay off your entire mortgage and walk away with a tidy profit.
Fixed Stability
It’s unlikely that the real estate market will crash in the coming year despite the economic uncertainty plaguing America. A housing crash is not entirely impossible, but it’s not likely going to occur in the near future. Instead, you can anticipate greater changes in the market itself, such as lower sales prices and better deals for buyers as homeowners need to sell their homes faster. There still hasn’t been a tremendous surge in property listings, which means sellers ultimately have the upper hand in the market. Buyers should make sure to act fast and try their best to stand out when making an offer as most properties are likely to have multiple interested parties at once.
