As 2021 jumpstarts, many trends we saw at the end of last year continue to make an impact on the housing market. Industry experts expect these trends to make the strongest impact on the real estate market this year:
Low mortgage rates reinforce a seller’s market. As we saw at the end of last year, interest rates on mortgages remain at a historic low. Last year’s record low interest rates spill over into the new year, as a tactic used by the Federal Reserve to bolster the economy while the coronavirus continues to surge. 30 year fixed rate mortgages remain below 3%. Deputy Chief Economist of Freddie Mac maintains that these low interest rates will cause higher demand for housing, therefore driving home values to increase.
Buyers are looking for more space and are finding it in the suburbs. An astounding 42% of working Americans worked from home during the pandemic. As companies are shifting to a remote workforce, buyers are now looking for homes that can accommodate both their personal and business needs.
Industry experts indicate San Francisco, New York City, and Los Angeles all have the biggest outflow, seeing more people leaving than moving into those cities. In San Francisco alone, 15% of professionals moved out of the Bay Area since the pandemic. Homes in Lake Arrowhead, about a 90 minute drive out of Los Angeles, have seen a price increase of 47.7%. Because of remote work and a need for space, suburban homes are increasing in value.
Technology will play a driving force in real estate transactions. With buyers and sellers adjusting to an increasingly remote lifestyle, they’re relying on innovative solutions to help facilitate sales. To match the growing need for technological advancements to aid buyers and sellers, 58% of real estate companies have put a digital strategy in place. As HousingWire states, “the imminent need for innovation and automation is now a requirement to not only survive, but thrive.”
Virtual tours, online document signing, and video conferencing - which have been heavily adopted by clients during the pandemic - are all predicted to remain commonplace for the rest of the year. Customers and agents have grown accustomed to a more efficient transaction when the home buying and selling is digitized. At Home Bay, our software is built to enable clients to do everything online: from listing homes, offer negotiation to closing and electronic signatures. Our website has tools and integrated AI to handle any situation that may arise.
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