It has been well chronicled that the real estate market has been particularly strong for the past year. The only exception to this was the April/May 2020 time frame when the country was experiencing severe lockdowns due to the novel coronavirus. With this said, the subsequent months more than made up for it with buyer demand exploding while home inventories have been at all-time lows.
A common question that we receive from our clients is whether or not they should buy now? After all, a seller’s market can be cause for concern for many buyers. With this said, the primary factor involved in this decision is whether you are financially ready for such an investment. Remember, it is not just having enough money for a down payment, closing costs, taxes, and insurance. Once you have closed on a property, there will undoubtedly be more expenses to follow.
What is the market forecast?
Home sales are predicted to increase by 21.9% with home values expected to rise 10.5% by December 2021. While mortgage rates continue to be at historic lows, they are also expected to tick up slightly throughout the year as well. Therefore, buying a home today could result in a much lower monthly payment than waiting to buy it at year’s end.
While the inventory of homes for sale continues to be a concern, it is expected that we should see this improve as we get into the spring and summer months. With the various COVID-19 vaccines being made available to more Americans, this should also assist with encouraging more sellers to list their homes for sale. After all, fears of potentially spreading the virus during showings has been a major reason for sellers to remain on the sidelines. According to the National Association of Realtors®’s Pending Home Sales Index, pending transactions may have dipped slightly (0.3%) in December, but year-over-year, they are up 21.4%. Lawrence Yun, Chief Economist for the National Association of Realtors®, expects strong home sales momentum, with sales up roughly 8 to 12% in 2021 vs. 2020, as well as prices rising more moderately, about 4% nationwide.
In closing, if buyers are financially prepared to purchase a home then it is recommended that they stay active in the market and be prepared to act swiftly. In South Florida, we expect the market to remain considerably competitive. With more Americans opting to relocate to The Sunshine State to work remotely, this is continuing to drive demand. It is imperative that buyers work closely with their real estate agents to be alerted of any new listings that hit the market. If and when a property meeting your search criteria is listed on the market, you will want to be flexible and agile to act quickly. In some cases, even presenting an offer prior to seeing the property is the best strategy.
Are you considering the purchase of a property in South Florida? We can help. Contact Live South Florida Realty, Inc. today!