You’ve probably heard a lot lately about house prices sky-rocketing and that we are in a “seller’s market”. Inventory is low across the country as there was/is a great shift toward spending more time at home. But as we are seeing, the limits put on our lives by the pandemic are starting to wane and if the pandemic taught us anything, it’s that anything is possible – including buying a home this year. So don’t despair and let’s look at buying a home in 2021.
Know Your Buying Power
Reflecting on your current income is important. Having a clear and current picture of what your finances look like, after coming out of the COVID-19 pandemic is a crucial starting point. If you intend to move from renting to a mortgage, your current rental payments will actually provide a sound barometer for what you can afford, in terms of a mortgage. Purchasing a property comes with a number of upfront costs (and ongoing costs your landlord took care of when you rented), but if the mortgage repayments are somewhat in line with your current rent and you have enough income to cover other unexpected costs you are on good footing. Taking this initial ‘reflective’ step will help you understand what you can afford when you really start to house hunt. The 2021 market is extremely competitive and preparation will be key – your dream home won’t wait for you in this market, unfortunately!
While inventory is low for properties across the country, it’s partially because of the drop in interest rates. When the rates start to steady and increase, which they will, there likely will be a further ‘panic’ surge. After that, financial experts predict the current housing boom will start to level out. So while properties will increase in price, you’ll likely hear less and less tales of properties having 20 plus bids put on them after a single open inspection. Organizing a pre-approved loan now is a great remedy to potential headaches down the road when not only the market calms down, but also your dream home is actually available for you.
Horror stories about high auction bids and monstrous cash purchases for homes boxing out prospective buyers are everywhere, but it’s important to not get intimidated by this or, as experts agree, falling into this trap too. There are a number of factors as to why there is a housing boom at the moment. We mentioned low interest rates already, but other factors include high lumber costs, an increase in builders going bankrupt, and antiquated zoning rules blocking new construction. Industry experts predict that eventually supply will return and the market will go back to normal. So if you can put off house buying plans until this starts to occur, you might be in a better place than current panic buyers will be.
So in 2021, while we may be getting back to some sense of normalcy in a post-pandemic world, the housing market is one part that may take some time to settle. When buying a home in 2021, expect inventories to be low across the country and the sellers’ market to continue. Navigating through this time for homebuyers will test even the most patient ones, so having experienced and professional real estate agents on hand will be crucial. When it comes to the Atlanta metro area, Lantern Real Estate Group is the best in its field. Get qualified concierge-level service whether you are looking to buy or sell.