Despite how the economy did a complete downturn because of the pandemic, the housing market has been one of the sectors that have highly supported the country’s economic recovery. In fact, in the real estate market, its annual price growth has reached record highs with the inventory continuing to fall. As prices keep on increasing, it is a testament to the resilience of the US housing market. This has been the case for the past few months, but how will it be next year?
The pandemic won’t last forever, which is why if you are planning to buy a Manhattan residential real estate this 2021, here are some local home buying trends to consider.
Low Mortgage Rates
The true game-changer would be low mortgage rates. This has been the lowest mortgage rates so far in history, with it now hovering at least 3.03%. Moreover, mortgage rates for housing are said to stay near 3% over the next 18 months, which means at 2021, there is still the possibility of low rates. Thus, Manhattan residential real estate will become more affordable.
You can also see how annualized new mortgage applications have been the trend in the past few weeks. As the economy slowly reopens, many people are grabbing as many opportunities as they can get. The home buyer’s vigor has powered the housing market, and the mortgage rates are considered one of its biggest factors.
One thing that has been affected by the pandemic is how sellers have retreated. As opposed to buyers who have become energetic, sellers are cautious. That’s why the inventory has dipped precipitously. This can be attributed to the fact that with the ongoing pandemic, they are careful so as not to increase the spread of the virus. But, this trend might come to a stop as 2021 nears. There might be more preference changes for homebuyers. The past few months, many of them have gone into the suburbs, but as the city slowly comes to life, many will want to go back to their Manhattan residential real estate in the city. This will result in many sellers wanting to get back into the housing market.
Popularity of New Construction
Since many sellers have remained cautious and with the decreasing inventory, homebuyers have found the appeal of new construction. Some have flocked to new construction, such as single-family houses. These Manhattan residential estates are also more preferable since they have not been occupied and will pose less risk associated with the coronavirus. Also, according to recent surveys, the sales of newly-built houses have increased by nearly 13% year-over-year in May.
Changes in Prices
In most cities, the increase in demand for houses has led to a surge in prices. With the high buyer interest, many homebuyers are moving much faster than last year to beat out the competition. Even though the housing prices have risen, the low mortgage rates have been offsetting the increased cost. However, although the price increase is universal among many cities, Manhattan has experienced a decrease of about 18% in the second quarter. Last May, the median asking prices for all the five boroughs fell, with Manhattan having the highest drop with 5%. For this reason, many of those who have always wanted to live in a Manhattan residential estate may now have the opportunity to buy one that’s affordable. So, if you’re planning to buy this 2021, you should do it when with the low prices in Manhattan and with the historically low mortgage rates.
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