GUEST BLOG from Karl Kennedy
What’s the Update on the Real Estate Market for 2021?
Some sellers are getting much more money for their homes and land.
People are still buying frantically; houses are starting to be snatched from the market as if they’ll never be built again.
Some people are staying put and not selling their home or buying another. Why? Probably because they’re waiting to see how the remaining months of 2021 play out.
It doesn’t matter. Whether you’re selling, buying, or staying put, you’ll want to check these real estate trends out so that you’re in the loop and up-to-date.
#1 There are slim pickings in the buyer’s market.
Honestly, there are not enough houses currently out there to meet the buyers’ increasing demand. The great homes that do make their way out onto the market often get snatched up really quickly. In fact, homes are selling three weeks faster than they did in recent years.
If you’re looking to find a home right now, we have a bit of advice for you.
First, sacrifice some of your wants. Think about it this way, you can always upgrade your space over time. For example, just because the house you’re looking at doesn’t have an at-home theater doesn’t mean you can’t find a great affordable projector with the perfect display screen a year or two down the road.
Then, expand your real estate search. Your current zip code search could just be super competitive. If you expand your search, you may find an ideal house. It might mean that you have to sacrifice the close proximity to your work or the school your child is going to attend in future years. But, a good real estate agent can help you with that.
#2 Home prices are still rising.
Since last year, the home seller’s market has grown approximately 20%, meaning the prices on houses have increased an average of 20%, which means some have increased less and some more. This is great for sellers but may pose a slight problem for buyer’s.
As a buyer, this means you’ll have to strictly stick to your budget no matter how many homes are getting plucked off the market.
To make it most affordable, try purchasing a home that only takes up approximately 25% of your take-home income. If you have a 10-20% down payment that will really help keep your mortgage payment lower..
Aiming for a fixed loan percentage is always the best; try to avoid variable interest rates at all costs.
For sellers, remember that this is an opportunity to make a great profit margin. This also means you’ll have great starter money to find your next home. Just work with a great real estate agent and don’t accept any lowball offers.
#3 Mortgage rates are currently very low.
Right now, buyer’s are jumping at the chance to snatch a low-interest rate. This year alone, 15-year fixed-rate mortgage loans dropped to 2.2%, and they're probably going to stay around 3% for the foreseeable future. This makes refinancing and applying for a mortgage kind of a no-brainer.
For buyer’s, make sure this doesn’t lead you to buy a house that you can’t afford. Also, make sure you don’t change your budget just because the interest rate is currently low.
For sellers, this is pure motivation for buyer’s to move quickly. The only thing that could temporarily stop buyer’s from clawing at your on-the-market house would be if the interest rates drastically rise, increasing the time your house stays on the market.
What’s the takeaway for real estate in 2021? Basically, homes are flying off the market, prices continued to rise into July, they are starting to soften now, and mortgage rates are at an all-time low to make it possible for buyers and sellers to make out like bandits. That’s it for now; check back in in 2022!