As 2020 moves forward and the pandemic continues to take a toll on all sectors of the economy, analysts have been paying careful attention. And while the DFW housing market did extremely well overall, particularly considering the situation, the trend is not likely to hold. All eyes are now turning towards what lies ahead during the upcoming new year and the real estate market forecast is indicating slow home price growth ahead. There are several factors at play that will influence the market and, while some of these may fluctuate slightly from the predictions, the data merits strong consideration in your plans for the future. Here’s what we think homeowners need to know about selling their Dallas Fort Worth homes in 2021.
Many families that would normally have been making a move upward in home size and amenities went into a holding pattern, hesitant to make a move during the global pandemic. Inventory is currently low, causing homes to be in demand, however, as the pandemic’s grip on the world starts to loosen, the predictions indicate that this trend will be reversing in the upcoming months. Many of these homeowners who were uncertain about moving in 2020 will begin putting their houses on the market in 2021. That could mean a soaring number of listings that will be coming onto the market, which they will be competing with when selling their Dallas Fort Worth homes in 2021. As it is unlikely that a high number of those who fall under the mortgage forbearance act guidelines will be able to begin making timely payments, the market is expected to be flooded with homeowners who need to sell their house quickly to avoid foreclosure. Very few can afford the luxury of time to afford holding onto a listing for an indefinite period.
Prices May Drop
In addition to the increase of supply causing housing prices to level off, the expected growth in delinquencies may mean downward pressure on home prices, which can impact homeowners who consider selling their Dallas Fort Worth homes in 2021. Additionally, the current uptick in COVID-19 cases may affect employment rates, which could have a negative impact on housing prices, resulting in the first decline in nine years. Many sellers may be inclined to hold onto pre-COVID pricing, causing their homes to sit for longer periods on the market, which typically leads to an overall lower sales price.
Mortgage Rates May Rise
Homeowners also need to know that many economists are predicting a rise in mortgage rates in 2021. The Fed, or the Federal Reserve, is the largest single buyer of mortgage-backed securities. The Fed will likely keep short-term rates lower, however, this may not hold true for some longer-term treasuries or mortgages. While they are not directly involved in setting the current mortgage rates, their policies indirectly affect these rates. Their purchases of mortgages have slowed as the year comes to an end. The amount they purchase as the new year begins will depend upon the outcome of the COVID vaccine and its effectiveness in normalizing the economy. In addition to the fed, new banking capital requirements planned to go into effect in 2021 will likely cause the rates to rise as well.
There is no time like the present. As delinquencies rise, homeowners need to know that the value of their property will change very little towards the positive over the coming year. Moving forward with a sale now will mean little to no equity loss, as compared to the risk and uncertainty of holding the property for another year. Should the prediction of dropping property values and rising mortgage rates come to fruition, you could actually see a loss of equity by holding onto your property into 2021. Additionally, with mortgage rates expected to climb, there will be yet another influence pushing buyers to make lower offers as the year progresses. Some homeowners may become financially upside down in their property, having more money invested than they will ever see come back through a sale without the real estate peak market.
Planning on selling your Dallas Fort Worth home in 2021? Get ahead of the curve by selling now to Dallas' Best Home Buyers! Homeowners need to expect that prices will likely drop and the market likely flooded with distressed properties. With extremely quick closing timelines, we make the process easy and much less stressful overall. We welcome you to call Dallas' Best Home Buyers today at (972) 309-9500 to save yourself frustration, time, and most importantly money. Learn more about what we can offer by reaching out to our team today at (972) 309-9500!