Content Written By: April Wilson, Ryan Winter LLC contributing writer
Over the last year, many things have changed, largely — how we live our day to day life. The COVID-19 pandemic has played a large role in the changes seen through the last year in the housing market. Many of these changes are expected to continue and even increase through 2021. These changes include where, why, what and how people are now buying homes.
Jacksonville title companies and title companies around Florida are making changes to keep up with the new wants and needs of today. US Patriot Title, a title company in Florida, is working to help real estate professionals stay on top of these changes to help their businesses evolve and thrive through these ever-changing times.
Overall, Things Look Good
The overall synopsis for the 2021 housing market is positive. Housing market and economic experts feel home buying sales will continue to increase, mortgage rates will stay relatively low and demand will continue to drive the housing market forward.
While most of the forecasts for the year are favorable when looking at the housing market, there are some concerns. There are many families experiencing job loss and money insecurities, there are a high number of homes in forbearance and the high demand versus low inventory of homes for sale is creating an affordability issue.
Nonetheless, the overall housing market for 2021 seems promising, but there are many other changes and new trends to consider. People are changing to evolve with the unprecedented times we are faced with. Families are looking for more space, individuals are looking to get further out of cramped cities and private outside spaces are becoming more important. Technology and the ability to conduct business (including the home buying process) online is a large factor contributing to the changes in real estate business.
US Patriot Title partners with Qualia and Pavaso to provide a safe and secure eClosing option for their customers.
Economists Expect Housing Sales to Continue to Grow Through 2021
In a Forbes.com article, realtor.com chief economist Danielle Hale says, “We expect sales to grow 7 percent and prices to rise another 5.7 percent on top of 2020’s already high levels.” And she’s not the only one who thinks that. Many experts second her statement claiming that 2021 housing sales are expected to soar and home prices to rise.
There are a few reasons Hale and other experts are forecasting this optimistic year for the housing market. For starters, mortgage rates are very low right now and will remain somewhat low for much of the near future. This is encouraging home buyers to go ahead and finance to purchase a new home.
Another large factor is looking at the age and time of life millennials are reaching. Much of the millennial generation is at a crucial point in life where it’s time to get married, buy a home and start a family. “The pandemic has accelerated what is a generational trend: getting married, having children and desiring more space,” Jesse Vaughan, co-founder of Landed, said in the Forbes.com article.
The COVID-19 pandemic is also convincing more people to move away from the city to acquire more space. With more people working from home, moving farther away from the office is doable. Plus, now that multiple family members are working or schooling from home, more space is necessary.
With advancements in technology and cyber-security protocols, the home buying and selling process can be accomplished remotely. This will also help housing sales grow.
Many experts are also expecting to see an increase in foreign buyers. With the COVID-19 vaccine available in the states matched with low-interest rates, buying homes in the states is attractive.
COVID-19 Effects
The COVID-19 pandemic is responsible for many new trends in the housing market. People are moving to different locations to get away from busy cities. Families need additional rooms and separate spaces to handle more people home for more hours of the day. With potentially both parents now working from home and their children schooling from home, having separate workspaces for everyone is vital. The overall cramped and locked inside feeling of last year has many desperate for change.
Peoples’ Wants and Needs Have Changed
According to Homes and Gardens, the wants and needs of people in 2021 is reflective of breathable and optimistic spaces. Bright colors like yellow or calming oceanic colors like blue and green are expected to be hot choices this year – along with bringing some of the outside, inside. Indoor plants create the clean, refreshing, breathable spaces people are craving.
More families are moving away from the very popular open-floor-plan design. Families need more separated spaces with an emphasis on home offices.
Outdoor spaces are also a hot trend going into 2021. More people are looking for enjoyable spaces outside where they can spend a lot of their day. Without places to go or people to see because of the pandemic, having the luxury to comfortably sit or even work outside is now considered a priority. Families are looking for specific outdoor spaces to relax for the evening or weekend, work during the week and play with their kids during the day.
Job Loss and Affordability
Experts are discussing some top-of-mind concerns for 2021. According to the Washington Post, “As of this month (January), 5.2 percent of mortgages, or 2.7 million, are in forbearance, according to Black Knight, a mortgage data and technology company. That represents $547 billion in unpaid principal.” Many houses currently in forbearance are expected to go up for sale as short sales or fall into foreclosure. While a negative situation for those families, it will add home inventory back into the market.
Dave Ramsey said in a recent article, “inventory was down 22% in November 2020 compared to the previous year.2 There just weren’t enough houses for sale over the year to meet buyer demand.”
Right now, there are more home buyers than sellers. There is a shortage of homes available for purchase and that is driving the prices of homes up. The prices for homes are already high and getting higher. This is causing an affordability issue, especially for first-time homebuyers.
