The real estate housing market in 2020 (with the exception of March and April) has been difficult for home buyers. Available For Sale Inventory is at all-time lows, mortgage rates are at all-time lows, and demand is at all-time highs. This has driven home prices through the roof. Not a good news if you are in the market for a home.
But don’t worry change is coming.
The Biggest Homebuying Opportunities Are Yet To Come
Real estate values are considered a lagging indicator of market shocks, according to Emile L’Eplattenier, chief real estate analyst and managing editor for TheClose.com. “Think of it like a tsunami that follows an earthquake: Even with massive damage to the stock market and dozens of industries all but collapsing, we won’t start to see the effects play out on real estate pricing for a few months at least,” he said.
“For one, home sellers who have been spoiled by tight inventory and hyperspeed gentrification over the past few years, do not expect it to last.” L’Eplattenier said.
So far, the government has taken several measures to stimulate the economy and protect consumers who can’t afford their bills. But that won’t go on forever. “Over the next few months, the government will eventually put the brakes on printing money. Eviction and foreclosure moratoriums will cease in many markets. And we [will] start to see thousands of businesses go under. This is when the real estate market is going to really start to wobble and fall,” said Owen Dashner, owner and operator of Red Ladder Property Solutions. “Thirty million-plus Americans unemployed is going to equal a lot of unpaid leases and mortgages, ultimately leading to foreclosures and a market downturn.”
Going further concerns about the pandemic caused many homeowners to put their plans to sell in 2020 on hold. Realtor.com just released their November Monthly Housing Market Trends Report. It explains:
“Nationally, the inventory of homes for sale decreased 39.2% over the past year in November…This amounted to 490,000 fewer homes for sale compared to November of last year.”
More people buying and fewer people selling has caused home prices to escalate.
However, with a vaccine on the horizon, those 2020 home sellers will be putting their houses on the market. So will the people already planning on selling 2021.
This will better balance supply with demand and bring prices down.
What this means is that if you can hold out on purchasing for the next 3-6 months or so, there will be an opportunity to buy at a large discount compared to now. Of course, you don’t want to swoop in and prey on the misfortune of your neighbors. But the truth is that if you’re going to buy, it’s better to wait until prices bottom out rather than spending tens of thousands more than necessary. “The correction is coming, and with it [will] come some opportunities for those prepared,” Dashner said.