What to expect in the RE Market in 2021: Are we going to see a crash???
It’s hard to tell with everything we have going on. I’ve seen so many different markets over the last 19 years and this has been one of the more unprecedented and unfamiliar markets since I’ve started.
If you look at the Housing Market Recovery Index, here’s a graphic from Realtor.com you see a V market, which was just as predicted back in March when the pandemic started. The market has recovered and is even looking better than when the pandemic started. Back in March we were at 106.5 and now we are at 112.8. There was a definite dip in the housing market when the pandemic first started but now as you can see here, the market dipped and then took a strong and steady rise, and now we are stronger than back in March.
This analysis measures 4 things. One being the Demand of homes, meaning are buyers wanting to buy. Two: it measures the Supply or Inventory, the number of homes on the market. It also analyzes Pricing, are homes prices going up or down, and lastly The Housing Recovery Index measures Time on Market. Inventory and interest rates are, in my opinion, some of the strongest indicators of why we are seeing such an increase in housing activity. There is lack of supply and high demand because interest rates are at all time lows.
Also, if you look at the number of active forbearances, and just to remind you, a Forbearance is deferment of mortgage payments. The number of Active Forbearances have been declining almost each month. Also, if we look at when homeowners exited their forbearance plan, you’ll see that 54.6% are paid in full, 30.7 are working out repayment plans and 14.7% are still in trouble. The things to be concerned about is that 14.7% very well turn into a short sale or foreclosure, so that is something to be made aware of.
The market is still hot and buyers are active. Look out for more information about the housing market and how it may affect you. Reach out anytime even if you’ve just go questions. We’d be more than happy to help.