The real estate industry has been in disarray since the pandemic began wreaking havoc on the economy and pretty much everything else in its path. Home prices are rising, interest rates are declining, and the industry as a whole looks a whole lot different than it did before COVID-19. Let's take a look at some current trends in the real estate industry and explore how they've impacted the market and essential services.
Home prices are currently rising and have been since 2020 when the pandemic hit and the economy pretty much tanked. In November 2020, home prices increased by 15 percent compared to the previous year to a national median of more than $300,000. For sellers, that's great news, as you can expect to receive a handsome profit if you were to sell your home right now. For buyers, that means you should limit your home payment to no more than 25 percent of your monthly income. You should also consider a 15-year fixed-rate conventional mortgage. Not sure how to get started? Then use a mortgage calculator to figure out how much of a monthly payment you can afford.
These days, since it's a seller's market, the ball's in your court, homeowners. If you want to get the best price for your home, work with an experienced real estate agent who knows your local market well. And don't be afraid to weigh your options when it comes to buyers; after all, you have the upper hand in these circumstances. In other words, if you don't like an offer, you can always wait for a better one — and you're sure to find one or several more in this market — as long as you're not in a rush to move.
With a majority of Americans working from home, along with their kids attending virtual school, the need for home services during the pandemic has increased significantly. Indeed, individuals and families are likely seeing higher utility and service bills due to increased usage of various systems. For example, HVAC, plumbing, and other home services suddenly became more in-demand than ever when COVID-19 hit, as contractors continue to report a boom in sales of high-end air conditioning systems and plumbing systems.
Interest rates are still super low right now. Actually, they're lower than they've been in nearly 30 years at 2.3 percent as recently as November 2020, according to Freddie Mac. Some economists believe interest rates will remain around 3 percent in 2021. Thus, if you're looking to get a mortgage and pay off your home quickly, you might be able to do so in this market.
With social distancing guidelines in place for most of the world, real estate services have gone virtual. Virtual home tours are on the rise, as people feel less comfortable going to a property due to the fear of contracting COVID. Closings have also taken the virtual route, allowing people to have mobile or online closings, rather than a traditional in-person one. Home inspections can also be done virtually now, too.
The real estate industry is always changing, but the changes that occurred when the pandemic began have been drastic, to say the least. With home prices rising, interest rates declining, home services increasing, and real estate services going virtual, it's certainly a different industry than it was prior to 2020.