Get Ready for the Next Real Estate Surge!
Several notable real estate experts have announced that enormous activity is expected in the housing market in the second half of 2020. If you’ve been dreaming of a new home for your family this year, now is the time to make your move.
Why is a boom market on the horizon?
Instead of a perfect storm, several factors will come together to create a perfect atmosphere for home buyers. Historical trends have shown that after a serious financial downturn, housing markets will experience significant bounce backs. One reason for this trend is the continuation of lower interest rates. During fiscal emergencies, it’s common for interest rates to drop, encouraging potential customers to make big-ticket purchases. These reduced rates typically extend well into the eventual economic recovery. At this point, the Federal Reserve is planning to keep interest rates low for at least the next five months. The lower rates will lead to a high level of bank lending during the second half of the year, and possibly into 2021.
It’s also common for the government to help Americans weather economic hardship during economic crises. Stimulus payments, special lending programs and increased benefits for affected workers were all provided by our government earlier this year, feeding into the typical patterns that appear prior to notable rises in the demand for real estate.
The expected continuation of work-at-home scenarios for many Americans will also encourage real estate sales. Those who will combine their home and work environments will be eager to upgrade their surroundings with larger or more comfortable houses, with dedicated office space for their work. Many city dwellers are also considering a move to less crowded, space-friendly suburbs.
Supply and demand theory also comes into play, as it does in every business transaction. In this case, the supply of houses available for sale was low at the beginning of 2020, making it a seller’s market. Many sellers dropped out of the market altogether during the height of the coronavirus pandemic. Now that our economy is in the process of reopening, some sellers are still choosing to wait in the wings, further reducing the number of homes available.
Barbara Corcoran, host of ABC’s hit show “Shark Tank”, describes these trends in greater detail in this article. She also notes that an upward trajectory of home prices is expected as the country continues its reopening efforts and more buyers enter the market.
Dave Ramsey, noted business and financial expert, also predicts a brisk return to nationwide home sales in the near future. His overview of the post-corona housing market can be an eye-opener for buyers – you’ll need to be on your toes, but if you’re prepared to sharpen your shopping skills, finding your perfect home could be in your immediate future.
Things are especially looking up for buyers interested in new construction. Some builders went on hiatus during the peak weeks of the coronavirus pandemic, decreasing the number of available brand-new homes on the market. However, at Ernest Homes, we embraced our designation as an essential business and worked through the entire quarantine timeline, keeping on schedule with both our built-to-order homes and our designated featured homes, those immediately available for non-contracted buyers. You can learn more about the upcoming building boom (and other exciting trends) in this CNN piece.
Still have questions about the real estate market for the rest of 2020? Call or message the sales team at Ernest Homes – we’re here to share our knowledge and expertise with you!
