How Will the COVID-19 Vaccine Impact the Real Estate Market in 2021?

Today’s timely guest blog post has been provided by HomeLight.

Big changes are happening in 2021, with people getting vaccinated for Covid-19, a new president in office, and economic shifts. If you are in the market to buy or sell a home, you are probably wondering what real estate trends you should be aware of to help you stay on track for success. The experts at HomeLight polled more than 1,000 agents across the country to see what we might expect from the real estate market in 2021. Here are some aspects that they highlighted:

It’s a seller’s market, for now

More people want to move into new homes in 2021 than are available, and that is creating what’s called a seller’s market. In this situation, bidding wars are the norm, leading to even higher home prices across the country. However, that could change and overall, 50 percent of agents said that a widely distributed vaccine would cause a shift away from a seller’s market. Buyers may want to wait and see if prices and demand might go down, but agents also predict that inventory may be in flux for a while. Agents also noted that as people return to work and the economy picks up, coupled with a vaccine, buyers and sellers alike may be more open to moving forward with their real estate goals.

Price considerations

Winter is typically a real estate off-season with lower prices, but 2021 is not a typical year. In the report, nearly three-quarters of agents in Q4 said home prices are on the rise in their markets and prices are expected to shift as a vaccine rolls out across the country. Prices are expected to keep rising in 2021, and 80 percent of agents said that homes would sell at the same pace or quicker than they did in 2020, as one possible real estate market prediction.

Mortgage rates in flux

As they were in 2020, in 2021 mortgage rates are at an all time low and as more people become vaccinated, potential buyers who put their moving plans on hold may feel confident to take advantage of these low rates and forge ahead. In Q4 2020, more than 95 percent of agents said that low mortgage interest rates were boosting buyer demand in their markets, up from 70 percent in Q4 2019. However, as people receive the vaccine and the economy improves, 34 percent of agents expect mortgage rates to rise, but it won’t be immediate — Fannie Mae predicts the 30-year-fixed will sit at 2.8 percent until the end of 2021.

Virtual is here to stay

In the era of social distancing, virtual became the norm, replacing in-person interactions — and real estate was no exception. While in-person showings have returned, the virtual trend from 2020 is still present in 2021 with 3D video tours, online consultations, and electronic document management. The good news about this is that even while the country is still trying to get a handle on Covid-19, real estate is still moving forward and those who are ready to buy and sell, can do so safely.

No one can really be certain what 2021 will look like when it comes to real estate, but with some of these trends in mind you can be better prepared to make informed decisions as you move forward with your real estate goals.