10 Questions To Ask When Buying A House Buying a home is likely one of the more expensive purchases you’ll make in your lifetime, and with that in mind, it’s crucial to make sure
Real Estate Crisis
Dated: November 17 2020
2021 Housing Market Update
The Covid-19 Pandemic has crushed and shaken the economy by wiping out hundreds of thousands of small businesses and putting over 50 million people out of work.
The real estate crisis is something that might happen in the housing market; it is like a Tsunami that is starting to build up but hasn’t hit the land yet.
What’s happening in the market right now, after the pandemic broke out, we have more houses currently for sale be off the market and many new constructions stopped temporarily.
We also have seen a reduction in supply, which forced the Federal Reserve to jump into action and lowered the interest rates in order to encourage people to borrow money again.
The supply was low and demand was high, which resulted in prices going sharply up and continued to go up over the last six months, while home inventory was still the same at many large and small markets.
When a crisis occurs, it usually hits the big markets first before getting to other submarkets.
We have seen that the New York real estate market has seen a big hit and the ripple effects are dragging down to other small markets across the US.
According to the latest data, 15% of FHA loans are 60 days delinquent, 2 million people over 90 days late on their mortgages, and over 30% of renters not making payments.
Forbearances are running out by March 2021 as local markets’ delinquencies and evictions are going up which will cause home prices to go down at some point.
We have also seen a great migration of people fleeing big cities like New York and heading to smaller towns across the US.
The pandemic has forced a lot of people to work or study remotely, as a result, more and more people are moving to smaller cities with cheaper housing.
In Tulsa Oklahoma, for example, they are paying people to move there to live and work remotely.
Florida as well is one of the biggest winners of people fleeing large urban hubs to less dense cities in the south.
The question remains, should you buy?
My answer is, it all depends.
If you are planning on purchasing a home, assuming you can qualify for the low rates, and stay at least 10 years in that home then it might be a good deal.
If you are an investor, it’s not a good time if you planning on flipping, but it would be a good investment for renting and generating positive cash flow as long as the location has long-term demand.