2021 Rental Trends
2020 was a challenging year for property owners. The coronavirus pandemic forced many people to move to cut costs, and the rental property prices in major cities dropped to an all-time low as employees switched to working from home.
As people are now slowly adjusting to lockdown restrictions and social distancing rules, the rental market is likely to witness a change in behavior and expectations for some time. People are slowly getting accustomed to conducting virtual real estate tours and making market transactions from the comfort of their homes.
With 2021 upon us, it is time to look at some of the trends expected with the new year. Below are some of the rental market trends forecasted for renters and property owners, and managers.
Rental Prices Will Likely Stay Stable for the First Half of the Year
Real estate experts rent estimate reporting suggests that the rental prices in 2021 will likely remain flat for the first half of the year. This will help consumers who lost their jobs due to the coronavirus pandemic or had their working hours reduced due to government-mandated shutdowns by providing them with rental relief.
Remote working has seen many renters move from high rent areas to areas with moderately affordable rents. Rent growth has been mostly negative as most operators now focus on renewing their property.
Market experts suggest that rent pressures will get back to full swing in the second half of 2021. Rental prices are also likely to weaken in dense urban areas, while suburban areas will most likely experience small rental increments.
Low Unit Availability Will Contribute To Higher Rental Rates
When the coronavirus hit the nation, many people had to rethink their housing situations. Most tenants left their high rent estates or homes for more affordable units. If you sold your home in 2020, there is a high chance that you may not be able to purchase a new unit in 2021. This is because there are few units available for rent in the market since there are minimal construction projects going on.
Increase in Demand for Affordable Housing
As interest rates remain low, most consumers are taking advantage to purchase affordable housing. Research suggests that home sales in 2021 is likely to rise to about 5 million. This is the highest yearly sales record since 2006.
Many landlords are slowly putting on-hold any new construction projects, which means there is an undersupply of housing. Demand for affordable housing is likely to grow as more people look for apartments in suburban areas.
Mortgage Interest Will Remain Low for Some Time
The average rate for a 15-year fixed mortgage rate dropped to as low as 2.31% in November. Now market leaders estimate that interest rates will continue to balance at around 3% in 2021. Although interest rates are low, the affordability of homes shouldn’t pressure you into buying a new home.
If you’re a home seller, a super low-interest rate will motivate people to buy your home. However, if interest rates begin to increase later in the year, you should expect your home to stay in the market for long.
Increase in Online Real Estate Services
Technology has made things easier, and more people are taking their businesses online. Today you can browse available units on the market with just a click of a button. You can work with third party buyers, use a virtual estate agent, or even make online closings.
Third-party buyers purchase your home, renovate, and sell it for a higher price. They essentially take care of everything in home listings, such as repairs, inspections, and home showings. They will charge you the same fees as any agents for commission. If you use a virtual agent, you get to reduce the commissions charged by traditional agents.
Online closings allow you to make home transactions using electronic signature apps to streamline the process of home buying.
The Buyers’ Market Is Likely To Remain Competitive
The increase in demand for affordable housing means that home buyers should expect a competitive real estate market in 2021. If you’re planning to purchase a home this year, chances are you’ll still likely have to beat out the competition.
However, some incentives such as low-interest rates and low rental space prices could offer relief to potential home buyers. If you’ve been looking for the best office space or dream of living in the city, you need to take advantage of the factors in place to make your move.
The current coronavirus pandemic has caused some uncertainties that are making it hard to plan for the future. However, the above rental market trends prove that it could be a good time to list or buy your home, especially if you reside in a suburban area.