2020 has been a rollercoaster year for all, and the effects of the global coronavirus pandemic have been felt in all aspects of society and business. Not least in the real estate business.
Many people have lost their livelihoods due to the global pandemic, and we still don’t know what is around the next corner for real estate.
But what will the future hold? Will house prices drop? Is it better to rent or buy?
In this article, we’ll be asking will home prices drop in 2021?
What Is the Current State of the Housing Market?
Currently, we are experiencing a seller’s market. This means that there is more demand from buyers than there are homes for sale on the market. This has meant that, although there has been financial uncertainty on the cards due to COVID19, house prices have held their own.
There have been several different factors driving the demand for houses. Firstly, there have been low mortgage rates. This has prompted a lot of people to buy a home.
Secondly, the peak buying season is generally spring and summer. In spring 2020, much of the world was in lockdown or quarantining. This meant that people could not buy houses, and the housing market was left largely on pause.
By the time the autumn came around, there was a bigger demand for houses than usual because there was a backlog of buyers.
In addition to this, the events of 2020 have put things into perspective for many people. Many people now work from home and have decided that they don’t need to be within commutable distance from the office. They also want more space.
All of these factors have pushed up demand for housing.
Should You Buy or Rent in 2021?
You may be wondering whether it is better to rent or buy a house in 2021? Traditionally, the debate of buying vs renting a home will always fall on the side of buying a property. One of the main reasons is that you can build equity in your property.
Not only that, buy your home could appreciate in value, meaning that when you eventually sell it, but you may do so at a profit.
These arguments still stand true in 2021. While house prices may still be high at the moment, there is still a stronger argument for buying your home over renting.
Will Home Prices Drop in 2021?
The effects of the global coronavirus pandemic are yet to be fully realized. As 2021 progresses, we are likely to see a lot of businesses going bust due to COVID19 and, as a result, a lot of job losses. This, in turn, could cause foreclosures and a reduction in the prices of houses.
Is 2021 the Right Year to Buy?
So, will home prices drop in 2021? The likelihood is that they will drop. If you are lucky enough to be in a financial position to buy in 2021, then you should.
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