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2020 has certainly been an interesting year to buy a home. Though record-low mortgage rates caused a surge in buyer demand, limited inventory stopped many buyers in their tracks. The past year also saw its share of bidding wars and virtual tours -- a byproduct of the coronavirus pandemic.
As we head into a new year, many buyers will no doubt still be clamoring for homes while mortgage rates remain competitive. Here are a few interesting trends that could emerge as 2021 rolls along.
1. Housing inventory could open up
Limited housing inventory doesn't just drive up home prices; it also gives buyers less selection and forces them to settle. In the coming year, we could see an uptick in property listings as coronavirus vaccinations roll out to protect the public. Though that's unlikely to happen on a widespread level until April at the earliest, there's a good chance more sellers will feel comfortable welcoming buyers and hosting open houses by late spring or summertime. Furthermore, if the economy is able to begin its post-coronavirus recovery, more sellers may feel stable enough to list their homes and contemplate a move.
2. Zoom towns could really take off
Zoom towns are housing markets that are growing in popularity due to the remote work trend. It used to be the case that to hold down a steady job, you'd need to live within commuting distance of your company's headquarters or satellite office. Nowadays, many people are working remotely during the pandemic, and that trend is likely to continue even once it's safer to return to an office building. As such, more buyers may be inclined to set up residence in ski resort areas, beach towns, or other locales that would normally be considered primarily vacation destinations. Of course, that could, in turn, drive up home prices in these areas, but it could also ease the pressure in more populated housing markets.
3. City homes could get a lot cheaper
The appeal of living in a large city isn't what it used to be. While a lot of people prefer to settle in cities for the benefit of being close to work, many will no doubt seek to abandon costly metro areas where square footage comes at a premium now that remote employment is likely to continue beyond the pandemic. Many big city dwellers, in fact, are likely to stage a mass exodus and head to the suburbs where their money can go further. All of this city abandonment could result in lower home prices in the coming year. So if you've been eying a major metro area, like San Francisco or New York, 2021 could be the right time to pounce.
Remember, while city life may not have much to offer during the pandemic, once things get back to normal, proximity to restaurants, theaters, and other amenities could enhance your quality of life in a significant way. Don't discount the upside of settling down in a city -- especially if you can do so for less money.
The housing market could look very different in 2021 than it does today. If you're interested in buying a home next year, be sure to keep tabs on these and other potential changes. The more informed you stay, the greater your chances will be of snagging a great deal on a home to call your own.
