2020 might have become one of the most unpredictable years in Human history. It has started with almost a superstitious optimism for many businesses that was crashed brutally in the early spring. CNBC and Yahoo Finance Newsfeeds started to look more like reports from battlefields, describing numerous losses and victims among civilians. On this background, nobody would predict that 2020 might be a record-breaking year for the Real Estate Market. Especially the sales segment. But it might appear that now it is the best moment to put your property on the market. Especially if you compare it to the flat 2019 and frighteningly unclear 2021. And there are several solid reasons for it.
It is a sellers` market now!
The classical equation of “Supply and Demand” works in 2020`s Real Estate market perfectly. The panic and insecurity in the real estate market caused a significant sales crater in the spring. It was mostly caused by a widespread rumor that 2020 will be the worst year to list your property as nobody will have the courage to sign a mortgage now. But the reality is different. Coronavirus has forced many people to change their lifestyle and working habits completely, which has inevitably lead to the need to re-locate and evaluate their homes. As a result, by the end of Summer buyers have exceeded sellers on the real estate market turning 2020 an ultimate “Sellers` year”.
- Having to adjust to working from home and homeschooling, Americans are looking for more comfortable and spacious accommodations. The latest research shows that at least 43% of Americans hope to continue working from home even after the quarantine restrictions are lifted. And about 70% of employers don`t mind! Therefore we witness a massive relocation from downtown dwellings to spacious living spaces of suburbia.
- A new generation of buyers is entering the market. In 2020 the Real Estate market was suddenly flooded by a massive wave of Millennials. This is a numerous generation of people who have been adjusting to digital technologies and teleworking for quite a long period. Therefore the Lockdown was not that much of a shock for them and their careers. This large group of quite solvent citizens is mostly first-time buyers not only due to their age but also because before the Lockdown constant relocation was a significant lifestyle feature for them. And nowadays buying property appears a much more reasonable and realistic solution for them.
That said, it is quite clear that the dramatic raise of the Real Estate Market in the Second Half of 2020 might be uneven. Luxurious and high-end properties will remain on the same level with no significant changes. But the raise of midlevel price-range Real Estate, especially in US metro areas is already around 96% and growing.
Loan Interest Rates will remain low.
Most buyers will need to obtain financing for the property purchase, and the good news is that in 2020 the interest rates will remain low, making their lives much easier and boosting the demand up. The Federal Reserve has already noted that throughout 2020 the loan rates will remain on the level, set in December of 2019 – between 1,5% and 1,75%. At the same time, there is a good reason to suggest that next year the situation will change dramatically.
This information is important both for homebuyers and those who are planning to sell their property to purchase a new one. Let`s say, if you are hanging on the fence, whether to close the deal in 2020 or the next year, it might be much more reasonable to take an action now. Otherwise, you will most probably have to wait for 5-7 years more until the situation stabilizes.
It is the best time to sell!
Summer has always been a special period for the Real Estate Market. It is mush easier to represent a house in the best light during warm and sunny days. At the same time, most people are seeking to move during the Summer break – right before the new school and business year begins.
This year the situation might seem different, but the circumstances show that listing your property now might be the best financial decision. The historically high demand on residential real estate is formed by 2 groups of buyers – those who wish to evaluate their living conditions due to the change of lifestyle and those who have been planning to sell their property for a while to buy a different one. The second group is significantly smaller which takes us back to the fact that demand exceeds supply dramatically. This leads to so-called “bidding wars” between buyers willing to get the desired property so much that they are ready for quite generous offers.
At the same time, if 2020 has taught us anything at all, it is not to make any long-term plans. There is no way to say what the future holds, so as long as we have already adapted to the new reality more or less, the second half of 2020 might be the best time to take the step.
2020 might be the most dramatic year for the Real Estate market. Despite the depressing predictions based on recession and unemployment level, the residential real estate market appeared to be a hot topic now. So in case you are hesitating, whether to list your property or to wait till “the dust settles”, you`d better start taking an action now. Statistically, there are already several potential buyers who are even ready to compete for your house right now.