This year has been tumultuous, uncertain, and unique in every way. The real estate market has not been immune to the crazy roller coaster that 2020 has proven to be. And it leads many to wonder what 2021 real estate will look like as we move forward.
If you’re looking at selling or buying in 2021, reach out to Google’s only 5-star real estate firm in Minneapolis, Roost Real Estate. With knowledgeable experts on staff, we can help you make your Twin Cities real estate dreams come true. Click below to hear kind words from our clients.
Real Estate in 2020 Surprised Many People
Interestingly, the Twin Cities real estate market during the coronavirus pandemic continued a trend that had already started early in the year. Many of our markets remain strong right now, as homes go under contract within hours of listing.
Frequently, sellers are receiving offers well over the asking price. We have continued to obtain the highest prices and best terms for our selling clients and helped our buyer clients win in multiple offer situations.
Low mortgage rates and the surge in work and learn-from-home situations have combined to urge many people to consider buying for the first time or upsizing. At the same time, most major markets have a low supply of homes for sale.
Although many people thought real estate might come to a halt when the pandemic hit, the opposite proved true. Realtors quickly adapted to COVID protocols for showing homes, and the market surged ahead. Our buying clients continue to tell us they feel completely safe on showings, and our sellers are echoing the same sentiments.
2021 Real Estate Will Likely React to Unemployment
There are still so many unknowns as we head into 2021. From COVID-19 rates to the change in administration to uncertainty about a new stimulus package, the real estate market will have many influences. Unemployment numbers amid potential new quarantine lockdowns will also be a factor.
The United States has seen historic jobless numbers due to the pandemic. This situation makes it more challenging to gauge what the next year will bring to the real estate industry.
The stimulus earlier in 2020 gave buyers some confidence in recovery. However, with no second stimulus in clear sight, financial leaders project that 2021 will see an incredibly high unemployment rate again.
The uncertain job market may cause people who had planned to buy a home to wait. It could also put the brakes on people’s plans to upsize. On the other hand, those with steady income right now may decide to buy while they can qualify for a mortgage. There is a lot of guessing for homeowners as they head into 2021.
If you are one of the fortunate Americans with stability going into 2021, learn more about buying here.
Unemployment Impacts Lenders, Too
Jobless rates have also caused a rise in delinquency of payments. With homeowners losing jobs and pandemic unemployment benefits running out, many people can’t pay their mortgage. While forbearances and a moratorium on some foreclosures are helping, those protections may expire on December 31, 2020.
Lenders feel the impact of missed payments and unemployment spikes. With uncertainty ahead, we have already seen some lenders start to tighten their requirements for getting a mortgage.
What Will Mortgage Rates Look Like in 2021?
Typically, financial experts have a good idea of what mortgage rates will do over the coming months. They can use historical trends and market data to make highly-informed predictions.
If COVID-19 rates stabilize or improve, the trends suggest rising median home prices, and lower interest rates will continue into 2021. The home prices would then stabilize towards the middle of the year and come down towards the end of the year.
However, with so much uncertainty, these predictions from leading experts are less than confident right now. Experts are changing their forecasts as the crisis evolves. As it stands today, Roost is forecasting rates to be stable and the Twin Cities market to continue to see appreciation.
What Is the Good News for 2021 Real Estate?
There are plenty of silver linings for those interested in real estate in the new year:
- The 2020 depletion of inventory means that new home construction may continue to boom in 2021. Many markets do not have enough homes for the number of buyers.
- If a second stimulus package clears the legislature, potential home buyers may feel more secure purchasing a home.
- The likely arrival of a vaccine in 2021 will help stabilize the economy and the unemployment situation. As jobs return, anyone who has hesitated to buy or sell may be ready to move quickly.
- It is possible that mortgage rates will remain low for much of 2021. For anyone with a stable job, low rates make it enticing to consider buying a bigger home. Many people are even using this time to purchase vacation homes.
- Sellers can continue to do very well. Many markets around the country can’t meet the housing demand for buyers. If you are considering selling, 2021 will probably remain a great time to do so.
- Homes with space may continue to be big sellers. With many companies shifting to work-from-home situations, a lot of homeowners want more square footage. And properties with bigger lots for kids, pets, and gardens are popular now, too. Several big businesses have indicated that they may maintain a remote workforce even after the pandemic subsides. If this is the case, more families will be looking to upsize.
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Roost Has Decades of Expertise to Help in Bumpy Times
Although we’ve never seen anything quite like our current COVID reality, the Roost team has plenty of experience during trying times. We work strategically and carefully in any market so that you get the best buying or selling experience possible.
Whether you want to sell, buy, rent, or just ask questions, we are available to chat. Roost is proud to offer boutique real estate services to our community in the Twin Cities. We are from here, grew up here, and live here. We know St. Paul and Minneapolis like the backs of our hands and are ready to educate you on what the next best steps may be for your real estate needs.
Reach out today to connect with one of our highly educated agents!
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