One popular saying you’ve probably heard before is that hindsight is 20/20. There is no doubt that 2020 was an interesting year for the real estate market and many Americans will be more than happy to put such a turbulent year into hindsight.
In the spirit of moving forward, we’re looking into a list of some of the most-asked questions for the real estate market in 2021.
Will Rent for Single-Family Residences Increase?
Single-family rentals offer excellent investments in two main ways: rental income and appreciation.
When it comes to appreciation during the pandemic, homebuyers took advantage of low interest rates. Many real estate experts believe this will last through 2021, especially after Biden entered the administration, extending $15,000 tax credits to first-time homebuyers. Home prices will go up and so will demand.
When it comes to single-family home investments, rents will continue to increase, providing lucrative sources of income. Single-family home investors should turn their focus to Gen X’ers and Millenials looking for places to work from home.
What Can We Expect from Non-Forbearance Mortgage Delinquencies?
Even in the aftermath of the coronavirus shock, not all delinquent loans entered forbearance. Flippers and wholesales should be keeping an eye on mortgage delinquencies that have not entered forbearance. Despite the housing market’s resilience during 2020, there is likely to be some distress for 2021.
Many mortgages received protection from forbearance thanks to the CARES Act, including non-qualifying mortgages, jumbo mortgages, and portfolio loans. About 24% of more than 3.8 million delinquent mortgages are not in forbearance at this time, according to recent data from Black Knight.
Is It Safe To Move Back To The City Yet?
Those invested in urban properties should be watching moving patterns very closely. According to USPS data, many young millennials are moving back home, though it does not necessarily have to do with escaping urban centers forever. Many are moving back to stay with their families in less-populated regions to stay safe and healthy for the time.
With the Moderna vaccine authorized and the Pfizer vaccine approved, urban vs. suburban rental stats are key for investors to watch to determine when it is the best time to enter the market.
Should I Consider a Condo As a Viable Option For Entering the Homeowner Market?
2021 is a great time to buy a condo. A look back at the end of November shows that condos were selling at a record-breaking 17% discount in comparison with single-family properties. Once the administration of vaccines hits its peak and COVID numbers start dying off, these discounted rates provide an excellent opportunity to buy.
Will 3/2 Properties Continue to Sell Quicker vs. Other Properties?
With the FHA loan limits rising in 2021 and the $15,000 tax credit in place, there will likely be a huge influx of first-time homebuyers in 2021. To determine the outcome, the best thing to watch will be bread-and-butter properties.
Bread-and-butter properties are those that have popular or common features that typical buyers are looking for. 3 bedroom/2 bathroom, entry-level homes typically have the highest demand compared to other properties. If these types of homes continue selling fast, even as prices increase, it will be a telling sign for first-time homebuyer activity.