Will housing market crash in 2021? / Next Housing Crash Prediction / What is a housing bubble?

Will housing market crash in 2021; Next housing crash prediction; What is a housing bubble?

While many areas of the economy have contracted, the housing market has stayed exceptionally strong. But can the good news last?

When pandemic-related shutdowns began in March, real estate brokers and clients scrambled to respond to the shift. Record-low interest rates caused some lenders to call a halt to new underwriting, and homeowners debated whether they should put their houses on the market. However, those first days of uncertainty ushered in a period of unprecedented demand not only in Texas alone but in the entire U.S. real estate market.

According to HARs 2020 annual market report for Houston, single-family home sales surpassed 2019s record volume by more than 10 percent! Single-family home sales for December jumped 25.5 percent compared to December 2019. The highest sales activity transpired among homes priced between 500,000 and 750,000, which rocketed 80.8 percent. The luxury market, consisting of homes priced at 750,000 and up, came in second place, climbing 54.0 percent. Followed by homes in the 250,000 to 500,000 range, which rose 44.6 percent.

But now that the Spring market is here, you may be wondering whether the good times can continue to roll on. If you are a homeowner, should you take advantage of this opportunity? If you are a buyer, should you jump in and risk paying too much? As a local realtor, I will try to answer some of your most pressing questions.

Welcome to my channel! I talk about all things real estate. Neighborhood tours and tips that are useful to landlords, renters, all types of homebuyers, and home sellers!

Speaking of home sellers, would you like your home to be featured on our channel? Just call me and send me an email. I have a no-pressure approach. Consider me as your consultant.

Now, if you are considering selling your home, make sure to watch until the end of this video so you can download my Home Assessment Worksheet. It is all yours for free!

As I was saying, I will try to answer some of your most pressing real estate questions and concerns in this video.

How is the present market different from the one that caused the 2008 meltdown?

At the beginning of the pandemic, fears of an economic recession and mortgage meltdown troubled homeowners across the country. For many buyers and sellers, the two seemed to go hand in hand, just as they did in the 2008 economic crisis.

In reality, however, the conditions that led to 2008s recession were very different from those that triggered the current downturn in so many ways. First, financial institutions are the main contributors to the downward trend during that period. Second, we now have a proactive federal reserve.

Because of lessons learned in 2008, banks are better funded, homeowners are holding more accrued equity, and, crucially, much of the economic activities are focused on financial factors outside the housing market. As many industries quickly pivoted to work-from-home, early fears of widespread job loss-related foreclosures have failed to materialize. Federal stimulus and Paycheck Protection Program also helped offset some of the worst early effects of the shutdown.

Are we facing a real estate bubble?

A real estate bubble can occur when there is a rapid and unjustified increase in housing prices, often triggered by speculation from investors. Because the bubble is (in a sense) filled with hot air, it popsand a swift drop in value occurs, which leads to reduced equity or, in some cases, negative equity conditions.

By contrast, the current rise in home prices is dependent on the predictable results of historically low-interest rates (around 3% on a 30 year fixed loan type) and widespread low inventory. Market supply was not able to keep up with the rising demand, thus plunging to a record low of 1.4 months supply.

The principle of supply and demand is working just as its supposed to do. Also, experts predict a strong sellers market throughout 2021 along with increases in new construction. This should allow supply to gradually rise and fulfill demand, slowing the rate of inflation for home values and offering a gentle correction where needed.

Effects of low-interest rates

According to Freddie Mac, rates are projected to continue at their current low levels throughout 2021. This contributes to home affordability even in markets where home prices otherwise be considered overpriced. These low-interest rates should keep the market lively and moving forward for the foreseeable future.

Effects of low inventory

Continuing low inventory is another reason for higher-than-average home prices in many markets. This should gradually ease as an aggressive vaccination rollout and continuing buyer demand drive more homeowners to move forward with long-delayed sales plans and as new home construction increases to meet demand.

Arent some markets and sectors looking particularly weak?

One of the big stories of 2020 was a mass exodus from attached home communities and high-priced urban areas as both young professionals and families opted for larger square footage and wide-open spaces of suburban and rural markets. This trend was reinforced by work-from-home policies that became permanent at some of the nations biggest companies.

Speculation then turned to the death of cities and the end of the condo market. However, it appears that these rumors have been greatly exaggerated.

With the first vaccine rollouts, renters have begun returning to major urban centers, attracted by the citys sudden rise in available inventory and newly discounted rental rates. Besides, buyers who were previously laser-focused on a single-family home responded to tight inventory by taking a second look at condos. While nationwide condo prices continue to lag behind detached homes, theyve still seen significant price increases and days on market reductions year over year.

In addition to these improvements, the 2020 migration has spread the economic wealth to distant suburban and rural enclaves that normally dont benefit from increases in home values or an influx of new investment. As many of these new residents set up housekeeping in their rural retreats, theyll revitalize the economies of their adopted communities for years to come.

How has pandemic affected the seasonal real estate market?

Frequently, the real estate market is seen as a seasonal phenomenon. However, the widespread shutdowns in March 2020, coming right at the beginning of the markets growth cycle in many areas, has led to a prolonged, seemingly endless hot spring market.

While Fannie Maes chief economist Douglas Duncan predicts slower growth from 2020s historic numbers, the outlook overall is positive as we embark on the 2021 spring selling cycle. Duncan anticipates an additional lift in the second half of 2021 as buyers return to business as usual and look to put some of their pandemic savings to work for a down payment. Thus, we could be looking at another longer-than-usual, white-hot real estate market.

How will a Biden administration affect the real estate market?

Projected policy around housing promises to be a boost to the real estate market in many cases. While some real estate investors bemoan proposed changes to 1031 Exchanges, the Biden plan for a 15,000 first-time homebuyer tax credit aims to increase affordability and bring eager new home buyers into the market. Additionally, Biden-proposed policy pinpoints low inventory as a primary driver of unsustainable home values and is geared toward more affordability through investments, construction and refurbishment.

Overall, according to most indicators, the real estate news looks overwhelmingly positive throughout the rest of 2021 and possibly beyond. Pent-up demand and consumer-driven policies, along with a continued low-interest-rate environment and rising inventory, should help homeowners hold on to their increased equity without throwing the market out of balance. Also, the increase in long-term work-from-home policies promises to give a boost to a wide variety of markets, both now and in the years to come.

Still have questions? We have answers!

While economic indicators and trends are national, real estate is local. Were here to answer your questions and help you understand whats happening in your neighborhood. Reach out to learn how these larger movements affect our local market and your homes value.

If you would like to know more about selling houses, do not forget to subscribe to my channel and hit that notification bell to keep you updated on my upcoming videos. Of course, do not forget to press that like button too. You may also comment the next topic you would like to see on this channel. Who knows? I might feature that in my next video.

Again, if you are planning to sell your home and would like it to get featured on my channel, do not hesitate to give me a ring. We can talk about it. Or simply fill up my Home Sellers Questionnaire in the description below.

As promised, my Home Assessment Worksheet is now available for download. Just scroll down in the description.

I have several videos about the home selling process. Feel free to watch them!

#texasrealestate #houstonrealestate #housingmarket #HAR2020annualmarketreport #singlefamilyhomes #economicrecession #mortgagemeltdown #2008recession #accruedequity #federalstimuluspayments #paymentprotectionprogram #workfromhomesetup #realestatebubble #lowinventory #lawofsupplyanddemand #lowinterestrates #2020migration #seasonalrealestatemarket #taxcredit #firsttimehomebuyer #conroerealestate #cypressrealestate #katyrealestate #montgomeryrealestate #springrealestate #thewoodlandsrealestate #tomballrealestate #jenniferyoingco #jenniferyoingcotexas #jenniferyoingcorealtor #jenniferyoingcohouston

_____________________________________________________________________
NEW VIDEOS EVERY WEEK. Subscribe here (https://bit.ly/2NZinpf)

ONLINE HOME BUYERS QUESTIONNAIRE
https://bit.ly/JYGQuestionnaire

ONLINE HOME SELLERS QUESTIONNAIRE
https://bit.ly/HomeSellerQ

HOME ASSESSMENT WORKSHEET
https://www.subscribepage.com/homeassessment

LETS KEEP IN TOUCH:

BLOG https://www.jenniferyoingcorealtor.com/
FACEBOOK https://www.facebook.com/jenniferyoingcorealtor/
INSTAGRAM https://www.instagram.com/jenniferyoingco.realtor/
TWITTER https://twitter.com/jyoingco7
LINKEDIN https://www.linkedin.com/in/jenniferyoingco/
FEATURED IN THE TEXAS EDITION TOP AGENT MAGAZINE (OCTOBER, 2020)
https://bit.ly/2GYGJ1e

**Jennifer Yoingco is a full time licensed Texas REALTOR (#648293) with Walzel Properties, LLC. She has been helping first time home buyers, experienced buyers and sellers search homes for sale, houses for sale in the greater Houston area (serving Houston, Tomball, Spring, The Woodlands, Cypress, Conroe, Magnolia, Sugarland, Richmond, and the surrounding cities). She negotiates to the clients advantage by using cutting edge digital marketing technology. She is teamed with marketing professionals who can showcase the home to the best advantage. Contact her for any real estate needs. Email: JenYoingco7@gmail.com (832)286-8636**

Resources:
https://www.cnbc.com/2021/04/13/when-is-the-housing-market-going-to-crash-consumers-ask.html
https://www.thebalance.com/is-the-real-estate-market-going-to-crash-4153139
https://abc13.com/houston-homes-for-sale-texas-real-estate-in-looking-a-home/10046087/
https://www.washingtonpost.com/business/2021/01/11/2021-housing-market-predictions/
https://www.homebuyinginstitute.com/news/texas-housing-markets-sail-through-recession/
https://www.ajmc.com/view/a-timeline-of-covid19-developments-in-2020
https://www.chron.com/coronavirus/article/houston-after-covid-pandemic-15889092.php
https://www.understandinghouston.org/blog/the-pandemic-turns-one-a-data-driven-look-at-covid-19s-impact-in-greater-houston
https://www.houstoniamag.com/home-and-real-estate/2020/12/expert-says-houston-real-estate-market-is-booming-even-in-the-middle-of-a-pandemic
https://www.houstoniamag.com/home-and-real-estate/2021/03/pandemic-covid19-impact-on-houston-real-estate
https://www.har.com/content/newsroom?pid=1761
https://www.dallasfed.org/~/media/documents/research/houston/2008/hb0801.pdf
https://www.cnbc.com/2020/05/27/here-are-key-ways-coronavirus-crisis-differs-from-the-great-recession.html
https://www.houstonchronicle.com/news/houston-texas/houston/article/Virus-fears-push-mortgage-rates-even-lower-15089888.php
https://www.forbes.com/sites/alyyale/2020/03/05/mortgage-rates-dip-to-lowest-point-on-record/?sh=9f82e346fc8f