As 2020 moved forward and the pandemic took a toll on all sectors of the economy, analysts have been paying careful attention and while the housing market did extremely well overall, the trend is not likely to hold. All eyes are now turning towards what lies ahead during the upcoming new year, the real estate market forecast is indicating slow home price growth ahead. There are several factors at play that will influence the market and while some of these may fluctuate slightly from the predictions, the data merits strong consideration in making your plans for the future. You will definitely want to take note of what homeowners need to know about selling their Long Island homes in 2021.
As families that would normally have been making a move upward in home size and amenities held off because of economic factors. Additionally, many went into a holding pattern, hesitant to make a move during the global pandemic. Inventory is currently low, causing homes to be in demand, however, the predictions indicate that this trend will be reversing in the upcoming months. Homeowners need to know about the soaring numbers of listings that will be coming onto the market, which they will be competing with when selling their Long Island homes in 2021. As it is unlikely that a high number of those who fall under the mortgage forbearance act guidelines will be able to begin making timely payments, the market is expected to be flooded. Very few can afford the luxury of time to afford holding onto a listing for an indefinite period. Additionally, for many the financial means are simply not within the budget, should a relocation or other life-changing event be forcing a move prior to the sale.
Prices May Drop
In addition to the increase of supply causing housing prices to level off at best, the expected growth in delinquencies may mean downward pressure on home prices, which homeowners need to know about selling their Long Island homes in 2021. Additionally, the current uptick in Covid19 cases may affect employment rates, which may also have an impact on housing prices, which could mean the first decline in nine years. Many sellers may be inclined to hold onto pre-covid pricing, causing their homes to sit for longer periods on the market, which also leads to an overall lower sales price. When it comes time to set the true value of the property, take into account the annual taxes and the original investment, along with monthly expenses and maintenance, along with the expenses involved in listing and selling a home. If a move is in your future, it may be wise not to delay.
Mortgage Rates May Rise
Homeowners also need to know about economists that are predicting a rise in mortgage rates selling their Long Island homes in 2021. The Fed, or the Federal Reserve, is the largest single buyer of mortgage-backed securities. The Fed will likely keep short rates lower, however, this will likely not hold true for some longer-term treasuries or mortgages. While they are not directly involved in setting the current mortgage rates, their policies indirectly affect these rates. Their purchases of mortgages have slowed as the year comes to an end, the amount they purchase as the new year begins will depend upon the covid vaccine and its effectiveness in normalizing the economy. In addition to the fed, new banking capital requirements coming into effect in 2021 will likely cause the rates to rise as well.
There is no time like the present. As delinquencies rise, homeowners need to know that the value of their property will change very little towards the positive over the coming year, if they are thinking about selling their Long Island homes in 2021. Moving forward with a sale now will mean little to no equity loss, as compared to holding the property for another year. Should the prediction of dropping property values and rising mortgage rates come to fruition, you could actually see a loss of equity by holding onto your property past the end of the year. Additionally, with mortgage rates expected to climb, there will be yet another influence pushing buyers to make lower offers as the year progresses. Some homeowners may become financially upside down in their property, having more money invested than they will ever see come back through a sale without the real estate peak market.
Planning on selling your Long Island home in 2021? Be ahead of the curve by selling now to CoMax Properties! Homeowners need to know prices will likely drop and the market likely flooded with distressed properties. With extremely quick closing timelines, we make the process easy and much less stressful overall. We welcome you to call CoMax Properties today at (516) 704-7025 to save yourself frustration, time, and most importantly money. Learn more about what we can offer by reaching out to our team today at (516) 704-7025!