The 2020 COVID-19 pandemic has brought the world to its knees and caused seismic shifts in all spheres of our existence. Our lives have been turned upside-down, and many are struggling to earn a living in these dark times.
However, not all is grim. In times of crisis, the supply and demand chain gets rattled, and this brings favorable opportunities to many people.
In 2021, residential real estate prices are sure to plummet, which means next year might be the perfect time to buy property. Here’s why.
COVID-19 Effect on Economy Will Cause Property Prices to Fall
As we all know, unfortunately, the pandemic has taken many lives worldwide. As countries went into lockdown for months, the virus has taken another toll — it has seriously hurt the global economy.
Unemployment rates have skyrocketed, and there’s no sign of the trend slowing down anytime soon. As experience has taught us, when the economy suffers, the real estate market tends to crash.
This is bad news for many, but every cloud has a silver lining. As home prices are going down, many people are gaining an opportunity like never before to buy property for cheap. So if you have been saving up, the year 2021 might be the ideal time to invest in real estate.
Mortgage Delinquencies and Evictions Go Up — Prices Go Down
Here’s another proof that one man’s loss is truly another one’s gain. Unfortunately, many people are super late on their mortgage payments, and many of them will not manage to get back on track in time.
Faced with evictions, people will turn to selling their property in massive numbers. This unfortunate turn of events will cause a huge surge in supply in the next year.
Alternatively, mortgage forbearance has allowed numerous borrowers to suspend their payments for a while. However, you cannot delay the inevitable forever. At some point, they will have to continue paying, and those who can’t afford it will be forced to sell. So that’s when the inventory from forbearance will hit the market.
Landlords Will Retire Early
As we can see, when supply rises, prices get low. Here’s yet another source of fresh housing on the market — rental accommodation. As the economic crisis hits hard, many renters are late on their rent payments or completely unable to pay.
This also means that landlords are struggling. Many of them even try to help out their tenants by postponing their payments.
However, as is the case with mortgage forbearance, this cannot go on forever. Many landlords will decide that it’s better to sell their property than to have no income at all. There’s yet another reason why housing inventory will be on the rise.
Next Year Might Be Prime Time for Buying City Property
Buying or renting in a big city can be extremely costly, but there are several reasons why 2021 may be a great time to invest in city property.
It’s no secret that recession always hits major markets first, and in this case, those are mostly large cities. People will sell their property, and you’ll be able to find dream apartments at incredibly affordable prices.
Moreover, the pandemic has caused hordes of city dwellers to move to rural areas seeking more space and freedom. Log cabins, such as those by Timber Living that you can conveniently pay for in installments, seem to have become a popular housing choice.
As the housing market is struggling, governments around the world are stepping in with various initiatives to help people buy real estate.
For example, the UK government has removed stamp duty charges for home buyers for purchases up to £500,000. This initiative could save people thousands in tax money.
There are sure to be many more similar initiatives in the next year as governments try to reignite the property market. You might want to keep an eye on these programs as they could be your ticket to buying a new house or apartment.
The Housing Market Crash Might Be Your Ticket to Your Dream House
As you can see, there are many reasons why buying residential real estate will potentially be a breeze in 2021. Hopefully, the pandemic will pass by that time. But even if that happens, the housing market will probably remain on the downward spiral for a while.
Of course, no one can predict the future with 100% certainty, but there are clear signs that indicate that the next year will be your opportunity to buy big for cheap.