US Housing Market in 2021

With exception to a few areas in the Northeast, and West Coast, there's only one way to describe the current US Housing Market in 2021...HOT!! Unless you're an investor looking for typical discounted deals, with some equity and value add, which are becoming like unicorns.

Its definitely still a seller's market. Every house that hits the current market is receiving multiple offers the first weekend, and usually starting a bidding war to drive up the price. There's just not enough inventory for the number of families looking to purchase homes right now. And every month more and more families are deciding to sell their home, while the market is hot, hoping to take advantage and get top dollar. Or are just relocating to more affordable markets after pandemic career transitions have allowed more people to work remotely moving forward.

But does it really make sense for people to sell right now? Sure, sellers may get a nice price on their property today, but they're just going to turn around and have to overpay to get another home to move into.

I believe many fear a post-pandemic housing crash like 2008-2010 due to the booming decade we've had since. But that was an entirely different event with the banking crisis, and millions of bad loans defaulting. Today, with COVID Stimulus the US Government has pumped $5.3 TRILLION into the economy. That amount of "thin air" money doesn't come without consequences. Our US Dollar is dropping rapidly in value. The cost of everything will increase above normal inflation rates. So, a home that $200K would buy today will be worth a lot more next year, just because the dollar value goes down.

So, what do we do as Real Estate Investors in this current market?

I believe we will have some foreclosures start hitting the market by late summer 2021, but its not going to be the numbers many are predicting. The Federal Government will encourage financial institutions to do all they can to work with homeowners...move past due balances to the back end, refinance, etc.

One increase market I see today is tired landlords, especially smaller owner-operators, who self manage. Many have had issues the past 12 months collecting rent, and may not have been able to evict tenants who were just taking advantage of the situation. Some of these landlords will be looking to sell off some, or all of their properties. Its a great time to adapt your marketing to target tired landlords.

Another huge opportunity market, I see today, is vacant commercial properties. Many companies went out of business over the past 12 months, while a lot of companies have also learned they can trust their employees to work remotely, and will be looking to downsize office space. Many commercial spaces will need to be repurposed. I look for office spaces to be converted into shared space, with companies using minimal offices. I think there will be more ghost kitchens open up, where multiple restaurants food is prepared under one roof, like drive-up, to go food courts for DoorDash, GrubHub, etc. Also, many developers may decide to acquire commercial properties, remove existing buildings to build more affordable housing units

Conclusion…Buy Smart!!

IMO, it’s important to remember as investors we make our profits by BUYING RIGHT. Its easy to get caught up in the hot market and try to talk yourself into doing a tighter deal. But you're better off to stick to what has worked for you in the past.

That’s my 2 cents, which isn’t worth a penny! 😉

Good Selling!! Keep Grinding!!

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Disclaimer: Author is not an Accountant, Attorney, Financial Advisor, Tax Advisor, Broker, or Agent. This is for general information, and not tax or investment advice. Readers should do their own due diligence and seek professional counsel prior to making any kind of tax changes or investments.