Changes to the Housing Market in 2021

2020 was an unprecedented year in many ways. No one saw a pandemic coming, and no one expected it to last over six months in duration. There have been big changes in the way people travel, work, and live around the world. One of the more unexpected positives of the year is the strong housing market. Thanks to low interest rates, people have been snapping up houses. Sellers are excited, too, to make a decent return on their investments.

Of course, nothing lasts forever. The outlook for 2021 is expected to be a mixed bag. For example, interest rates are expected to stay low. 2021 will still be a great time to get a new mortgage.

On the other hand, home prices might drop, leading people to lose their equity. Much of this depends on the way the government handles the pandemic response. Without another stimulus check, people may need to look into short sales.

There’s projected to be plenty of demand for housing. America is still having a housing crisis, with a shortage of units available at prices that are affordable for renters. Depending on what happens with the renewal of the CARES Act, apartment prices may continue to drop, too. Multi-unit homes have been hard hit by the pandemic. Restrictions and recommendations for social distancing have driven people out to the suburbs or back to their parents’ homes.

In terms of real estate, the whole commercial space has been particularly hard hit. Companies have left their office spaces, and many storefronts have been closed, too. With people working from home and performing well, it’s unclear whether businesses will keep leasing huge office spaces.

Anything related to hospitality is expected to suffer, too. Hotels have suffered due to the lack of business travelers. In fact, high-end hotels in areas like Rodeo Drive and New York City have closed their doors forever. Restaurants are continuing to operate on a mostly dine-out basis. Some jurisdictions allow for outdoor dining. That becomes complicated over the winter, especially in markets like New England, Colorado, and Utah.

It’s unclear whether tents provide more protection from virus transmission than walls. It also remains to be seen whether consumers will enjoy dining in chilly tents.