Should You Sell (Or Not Sell) In 2021?
In 2020, buyer demand increased thanks to record low mortgage rates. Homebuyers are eager to purchase, but the low inventory of available homes on the market led to increased demand and higher home prices – making it a seller’s market. For homeowners, it’s a great time to sell your home and receive a maximum return on your investment. But the question remains: will 2021 follow the same trend?
If you’re unsure about selling your home, here are some reasons to sell and reasons to wait, depending on your circumstances.
Reasons to Sell
- Low Interest Rates. It’s well-known that mortgage rates hit historic lows in 2020. Real estate professionals predicted interest rates would hover below 4% in 2020, even before the pandemic. The pandemic’s impact played a major role in lowering the interest rate. According to Freddie Mac, the first time mortgage interest rates set a record was in early March 2020 with a rate of 3.29 percent – a 50-year low. That record was broken in early December 2020 when the rates plummeted to 2.71% for a 30-year fixed-rate mortgage. Interest rates are expected to rise throughout 2021, reaching 3.4% by the end of the year, but that is still low compared to historical mortgage rates.
- You’re Still In Your First Home. Entry-level priced homes, often purchased as starter homes, are expected to see increased buyer interest throughout 2021 – especially in areas where home prices are increasing. Entry-level pricing is considered the lower 33 percent of home sale prices in the area. The low inventory of available homes in the current market creates opportunities for sellers to benefit from eager buyers, as well as possible multiple purchase offers above the listing price.
- You Need to Move. If you need to move due to a job change or for any other reason, it’s still possible to sell your home and find a new one. The low inventory and high demand can help your home sell. According to realtor.com, a home priced on par with its market value or a competitively-priced home will sell quickly. However, if you have a loss of income or are unable to pay your mortgage, selling could be a valid option.
Reasons to Wait
- You Recently Refinanced. There’s no reason to sell your home soon if you refinanced recently to take advantage of record-low mortgage rates. Hopefully, your refinance lowered your monthly payments and helped to ease some financial stress. Refinancing is an alternative to selling your home, especially if you haven’t found the right home yet.
- You’re Worried About Affording a Home. The pandemic has made everyone uneasy about the future of our jobs and income, even if you’re fortunate even to avoid being furloughed or unemployed. If you have any doubts or uncertainties, you should delay selling your home and purchasing a new one until the economy and job markets rebound. If you do experience any loss of income, contact your mortgage lender to discuss deferring payments for the short-term. The Coronavirus Aid, Relief, and Economic Security (CARES) Act also provides options for mortgage payment assistance due to COVID-19.
- You’re Worried About Finding a Home. Being in a seller’s market puts a home seller at an advantage and a disadvantage. The good news is that you will likely sell your home quickly and higher than the asking price. However, in a real estate market with low supply and high demand, this means you’ll have to find your new home quickly and participate in a bidding war to get the house you want. Waiting for a more balanced real estate market likely will not hinder your ability to get a good purchase price for your home. While there likely won’t be multiple offers above the asking price, you’ll still see positive growth with your home’s value.
At Lakeshore Realty, we work tirelessly to help our clients achieve their real estate goals. Whether you are looking to buy or sell, the professionals at Lakeshore Realty will be able to help you along your journey. For more insight and advice about buying and selling a home, contact us today at 828-456-4070 or visit our website.