Thanks to buyer demand and the easing of restrictions during the summer, the US housing market performed better than the dire forecasts when 2020 began. But since no one’s still quite sure on how the pandemic will play out in the next few months, caution remains the order of the day.
As market forecasts extrapolate on current trends, experts are seeing more growth in the housing market as we head into the next year.
Homes may list at lower prices
In the first months of the pandemic, the housing market adopted a wait-and-see approach nationwide. Sellers postponed listings and buyers put off their home search, even as mortgage interests kept dropping. Now, experts believe that home prices will ease down toward the end of the year and into early 2021 after frantic market activity during the summer.
Also, federal programs like the CARES Act are expected to end this year, rendering some homeowners unable to keep up with mortgage payments. More foreclosures are anticipated, though not as bad as during the financial crisis in 2008.
A second wave might stall activity again
Easing coronavirus restrictions can provide that much-needed boost to the economy but can also trigger a resurgence in cases. The worst-case scenario is that select areas will have to reinstate lockdowns, like what was done during the first half of the year at the onset of the pandemic.
According to experts interviewed by Forbes, the second wave of cases is likely to affect the rental market disproportionately.
Housing supply will continue to remain low
Even before the pandemic hit, there was a higher demand for homes than what was actually available for sale in the market. More so now, especially among sellers who can afford to wait for better times. Those who decide to list now can get a good price as demands remain high; however, they would have to do more juggling if they’ll be using proceeds from a sale to finance a new home.
First-time home buyers must be more patient in their home search. The low housing supply makes competition fierce. Also, many sellers and lenders may prefer buyers who they know are capable of meeting stringent credit and financing requirements to qualify for record-low rates.
The suburban New Jersey market appears bullish compared to these sobering nationwide forecasts. Here are some trends locals can expect:
Home prices are climbing
Counter to the downtrend of national forecasts, homes in suburban New Jersey should see their values increase. Buyers from major cities like Philadelphia and New York are searching for less-populated areas as a result of the pandemic. Now, they are setting their sights on houses for sale in towns like Pennington, NJ. Since home values, in general, are expected to rise up to 2021, buyers who can purchase a home in New Jersey’s suburbs may also witness a rise in their new home’s value even soon after the purchase.
Buyers are riding the “value” high
Moving to New Jersey allows out-of-state and city buyers to pack more value into the money they’ve previously spent on exorbitant rent. Here, many homes have monthly mortgages that are equal to or cost less than the average rent in nearby cities. Theoretically, you as a buyer could afford a five-bedroom home in the suburbs with the rent you paid for a two-bedroom apartment in Philadelphia or New York.
If you want to know more about the trends in Mercer County, reach out to our expert team at David DePaola & Company Real Estate. Discover your options today; call 609.883.4161 or send an email to david(at)depaola(dotted)com.