Volatility has shaken nearly every industry because of the 2020 pandemic. The real estate market is no exception, although real estate agents can still capitalize. Based on the opinions of 15 industry experts from Forbes Real Estate Council, here are some near-term predictions for the real estate market.
1. Robust Housing Demand
Although many homeowners expect to fall behind on mortgages, the real estate market should grow due to rising distressed property sales. New homes will attract buyers of all ages. Developers will also build new homes to replace old and rundown structures.
2. Home Sales Will Mirror 2019 Data
Look for existing home sales to match similar levels from late 2019 despite financial challenges caused by the pandemic.
3. Continued Demand for Refinancing
As Covid-19 fears lead to financial difficulties, homeowners will turn to refinancing as a solution while mortgage lenders will go digital. This could also result in homeowners getting and closing instant mortgages.
4. Rising Foreclosures
One of the most certain predictions for the real estate market will be increased foreclosures, short sales, and bank-owned properties due to layoffs. Foreclosures will coincide with short sales and an uptick in bank-owned properties.
5. Telework Will Influence Home Buying
Among the most certain real estate market predictions, remote work will influence buyers’ preferences and expand their geographic options.
6. Growing Dependence on Tech for Social Distancing
Many prospective homeowners will be interested in digital technology, such as automated messages to replace in-person communication to facilitate the sale process and social distancing.
7. Accelerating Interest in Virtual Tours
Virtual tours will become the norm for homebuyers looking to see panoramic photography and video of homes they seek. But buyers purchasing higher-priced homes might still prefer in-person tours.
8. A Surge in Multifamily and Industrial Asset Investing
The resilience in multifamily and industrial asset investing, combined with low-interest rates, will strengthen capital reallocation between real estate classes.
9. Stability in Class B and C Properties
While Class B multifamily sales will remain strong, with 95 percent of rent collections remaining high, Class C property sales will be slightly weakened by COVID-19 exposure and delinquencies.
10. Expansion of Preferred Equity Funds
The pandemic has caused multifamily home and apartment complex stakeholders to focus on higher fixed-income renters as part of risk management. Stricter lending will tighten financing, which will favor preferred equity investing.
11. More Discount Opportunities for Homebuyers
Pandemic fears will cause some sellers to liquidate properties at lower prices than fair market value, creating discount opportunities for homebuyers.
12. Slower Growth in Commercial Real Estate Sales
The combination of remote work and slower economic and income shortfalls for certain businesses will lead to less demand for commercial real estate buying.
13. Steady Growth in Warehousing Market
Warehouse operators will prefer to expand locations to optimize distribution due to shifts in state and local mandates on business activity.
14. Rising Interest in Suburban and Rural Homes
Since rural areas have been the least affected by the pandemic, homebuyers will view them as a solution to the crisis. They will also favor suburban living to gain extra square footage and outdoor space.
15. More Demand for Fitness Amenities
Shutdowns have caused homeowners to participate in more home activities to remain physically active, raising interest in fitness and leisure options.
These real estate market predictions will help prepare you for the property buying opportunities in the fourth-quarter of 2020. Contact the experts at Brighton Escrow Inc. to learn more about the current state of the real estate industry.
