There is speculation that we are on our way to a real-estate bubble in 2021. With competition for housing starting to dwindle as workers are being asked to go back into the office and travel starting to open up, there is evidence that the real estate market will start to level out. But unlike the 2008 crash, which had a high influx of subprime mortgages, the potential increase of foreclosures from homeowners who have lost their jobs and have not been able to make mortgage payments. However, with the housing market starting to level out, there is one unique characteristic of the United States housing bubble that real estate agents can take advantage of.
Is the Housing Market Slowing Down?
At the start of the Covid-19 pandemic, the restriction of the stay-at-home-mandate led to an influx of homebuyers in the market, as many were forced to leave their jobs or work from home. Now that regulations have relaxed, the country has started to open up, and Americans are spending less time at home, therefore are slowly dropping out of the real estate market and are choosing to spend their time and money somewhere else.
David Bolos, VP of Operations for Radian, a technology company that helps make real estate services easier to access, described the growth in foreclosures as “be[ing] a kind of a slow, yet a gradual growth in the default industry as a whole.” “But I think we all agree if it won’t really be a tsunami, it’ll be more of a gradual build.”
Real estate agents can take advantage of the 2021 housing bubble that will inadvertently come to pass by getting trained in working with foreclosures as there will be an influx of people who will need that type of service.
For Those Looking to Purchase a Home in 2021
Overall, the market is becoming more balanced and following typical seasonal trends. The scales are still tipped in favor of sellers, but not as dramatically as they were in the spring. Competition to get into housing is looking like it’s slowing down according to studies conducted by Redfin.
In July of this year, competition to get into a house decreased by 10 percent from the previous month. “Competition has started to slow in the last three weeks. We’re now seeing five to eight offers on homes instead of 25, and they’re coming in $5,000 to $10,000 above the listing price instead of $50,000 to $60,000,” said Scott Mercer, a Redfin real estate agent in Sacramento, California. Buyers are pushing back and giving less to sellers in their negotiations. It was only a few weeks ago that buyers were giving up their right to have inspections done on the house they were trying to buy, as well as waiving appraisals among other more extreme tactics. Now, as more inventory starts to come on the market and summer begins to ramp down, buyers feel like they can start asking for those items again. This is great news for real estate agents looking to get clients into homes this year.
The housing market is still competitive but pending sales were down 10 percent from their 2021 peak, so there is hope that the market will still keep leveling out. “[H]ome sellers are adjusting their price expectations or seeing their homes sit on the market,” said Redfin Chief Economist Daryl Fairweather. “There could be even more listings coming on the market as mortgage forbearance ends and homeowners with missed payments decide to sell. And mortgage rates remain near all-time lows with no signs of an increase on the horizon.”
The following graphs show that homes are starting to sell at a more appropriate pace instead of selling in under a week, which is about four times quicker than the regular selling rate. This means that buyers should look forward to a better housing market to break into. Additionally, asking prices have eased back to where they were in May of this year, and while they are still getting bid up half the time, buyers will slowly have more opportunities to purchase a home in 2021.
Need Help Managing Your Business?
If you are interested in finding out what real estate coaching can do for you and your business and how you can help add inventory to the market, schedule an appointment for a free business consultation with a Workman Success Systems expert analyst. When you implement Workman Success Systems’ proven strategies, real estate coaching can be the key to unlocking real growth in your business.