Have you put off buying a new home due to concerns about the housing market? With conditions expected to stabilize in 2021, now is an excellent time to purchase a house in Central New Jersey.
The Introduction of the Coronavirus Vaccine Is Likely to Have a Positive Effect on the Housing Market
The past year has been like no other in recent memory. This time last year, COVID-19 seemed like a minor concern. Who would have ever thought that the country would be in the midst of one of the worst pandemics in history just a few months later?
As coronavirus cases increased in 2020, a curious thing happened to the real estate industry. Although higher-than-normal unemployment rates might normally have lowered home prices, that wasn’t the case. In fact, prices soared while inventory declined. Many potential homebuyers had a hard time getting an offer accepted, even if they offered thousands of dollars over the asking price.
Fortunately, the introduction of several coronavirus vaccines promises to offer some relief for home buyers and make it a little easier to purchase a home this year.
More Homeowners Will List Their Homes for Sale
Some homeowners who would have normally put their homes up for sale held on to them during the pandemic. In mid-April, real estate listings were 48 percent lower than the previous year, according to Core Logic. By the fall, inventory was slowly beginning to increase. Positive inventory trends have continued into 2021. Homebuyers will have many more homes to choose from this year if coronavirus infection rates drop as expected.
An improving economy and decrease in unemployment numbers may also be factors in rising home inventory. The Federal Reserve expects the unemployment rate to drop to 6.7 percent this year. Thanks to an increase in jobs and more job stability, homeowners may feel more confident about their financial situations and more willing to sell their homes.
Builders Will Offer More New Homes
Home builders were understandably reluctant to add new homes during the uncertainty of the past year. Although construction starts rebounded by mid-year, fewer new homes were available last year overall. Things are likely to be much different this year.
Construction economics analyst Ed Zarenski told The Motley Fool that he expects new housing starts to increase by 5 percent in 2021. Of course, new home construction will vary depending on the area of the country. Construction rates in high-demand areas like Central New Jersey may be even higher than projected rates.
New homes offer several advantages for homeowners including:
- Up-to-date features and amenities
- Energy efficiency
- Lower utility bills
- Home warranties offered by the builder
- Few maintenance or repair bills
- Environmentally-friendly construction techniques
- Special financing available from builders in some cases
Prices Are Expected to Stabilize
Attempting to buy a home in 2020 was often a frustrating experience. Homes sold in record time and bidding wars created a seller’s market.
Bidding wars may soon become a thing of the past in many areas as housing inventory increases. Prices tend to become more stable when buyers are no longer in fierce competition with each other, which will make homeownership much more accessible.
Although prices are stabilizing, mortgage interest rates are on the rise. Real estate experts predict rates of 3.1 to 3.3 in 2021. Despite the slight increase in interest rates, buying a house is still a good value. Stabilization of home prices may offset the bump in the interest rate and probably won’t raise homebuyers' costs significantly.
Are you ready to buy a new home in Central New Jersey? Check out Country Classics at Scotch Plains and Country Classics at Frenchtown, our future community. Our Scotch Plains community features seven single-family homes located on a private cul-de-sac, with only a couple of opportunities remaining. Country Classics at Frenchtown will offer 19 single-family attached homes in a scenic location along the Delaware River. Contact us to learn more about these new communities.