2020 has been an unprecedented year in just about every way. Back in March at the start of the pandemic, people across the country started wondering if a real estate crash was right around the corner as the economy shut down. Stock markets plummeted and businesses shut down, but the real estate market was a giant question mark.
People argued for both sides, but no one could have predicted that the real estate market would not only remain steady but actually continue to rise to record heights. Now, we're in a hot seller's market but buyers aren't slowing down. As a real estate investor, it's important to understand what exactly is happening in the real estate market in 2020.
1. Home Prices Continue to Rise
Back in April, things weren't looking great for the continued rise of real estate prices. Growth drastically slowed down compared to previous months. However, as we got into May and beyond, growth rates sped up and are now growing at pre-COVID rates.
This is great news for sellers who were worried that a real estate crash could cost them a ton in equity. It also gives sellers the choice to cash out now or continue to wait as prices creep up in the months ahead.
For buyers, it might seem like a terrible time to buy, but that's actually not the case. There are still plenty of deals going around, and we can't ignore the fact that there are people in this country hurting from the pandemic looking to sell their house fast, even if it means selling for less than it's worth. As a buyer, you just need to know where to look and have the help of a professional real estate team to find you the best deals.
2. Mortgage Rates Continue to Fall
If you're a buyer that needs some convincing to enter the real estate market, this should do it: mortgage rates are at an all-time low and continue to fall. If the pandemic brought us anything positive, it was that mortgage rates have been slashed, with rates going for as low as 2.5% for a 15-year mortgage. This means that even if you pay a higher sale price for the property, these low rates will make the property less expensive than they were several months ago.
Unfortunately, mortgage rates are unpredictable, especially in an election year. While it seems rates will continue to fall through the end of this year and into next year, there are no guarantees. If you're on the fence about buying a house, now might be the time to pull the trigger so you can lock in an amazing rate.
3. Don't Wait Around for the Real Estate Market to Crash
People have been waiting for the real estate market to crash for years, hoping to jump in on incredible deals similar to what came during the housing crisis of 2008. However, people who have been waiting for a crash are continuing to watch home prices skyrocket when they could have bought in years ago.
With the pandemic this year, there's an even larger pool of potential buyers waiting for a crash, and the same thing is happening. Prices didn't drop, but instead continued trending upward. Again, people are missing out on building equity because they are trying to time an unpredictable market. If you try to time the market and wait around for another crash, you could be without an investment in real estate ten years down the line while you're still waiting for a crash.
4. Millennials Now Make Up the Bulk of Home Buyers
Millennials are now in the majority of homebuyers. In fact, it seems the pandemic may have encouraged more Millenials to purchase a home because people are placing more value in where they live as work-from-home becomes the norm.
As more Millenials save money and decide to settle down by purchasing a home, buyer demand will continue to rise. As an investor, it's important to realize this trend now because it's more evidence that the housing market will be strong for the foreseeable future.
Start Investing In Clearwater Properties
The time to invest is now. Don't try to time the real estate market, but instead work hard to find the best deals so you can start building equity right away. When you work with an experienced real estate team, you'll have all the support and resources you need to get an incredible investment property. Contact us today to start investing in Pinellas County, one of the hottest spots for real estate in the country.