What is the biggest component to engage any individual into making life changing events? F-E-A-R  It is fear of the unknown that empowers individuals to make decisions, some not as wise as others.  With the political uproar that this country is currently facing along with COVID-19, many individuals are fearful and some will act in haste making bad decisions, some freeze in terror and miss opportunities.  Let's try to unravel all of this to see what the lies in the months/years ahead.



So we first have to know where we are before we know where we are going.  When COVID first hit our country and we shut down on 3/17/20.  The short term real estate market became extremely volatile.  Many homes that were under contract never saw the settlement table.  Why?  The banks were fearful.  They quickly changed requirements for obtaining a loan.  A purchaser who could purchase with a credit score of 580 could have purchased a home in February of 2020, but by mid-March, the score jumped to 640+, so if that wasn't enough to slow the market and crush hopes, aspirations, and dreams, they also dropped loan programs, so a business owner using specialty loans directed toward small businesses were also denied and they also lost out on dreams.  Fast forward only a few months, interest rates drop and the buyers who fit the new guidelines start to look for homes.  Sellers are still a little edgy about letting strangers in their house during these uncertain times, so inventory stayed low while demand grew.  Each passing month, we see more and more homes hitting the market, but at the same time, more and more demand is becoming apparent.  

Winter months are usually slower months of the year.  December or January would typically each have about 100-150 properties listed and about half that number under contract.  This past December, Howard County had 271 homes new to the market (much higher than a typical December) and 56 went under contract (average number for December in an average year).  Let's compare that to January 2021, Howard County had only 23 homes hit the market and 259 went under contract!  While the total homes coming on the market in January is less than normal, the number of under contract homes is off the charts!  Especially for January!  This market is NOT slowing down at this time!

So, what will cause the market to make a change? 

Well, one factor is of course the interest rates.  We are currently in the unbelievable epic lows around the mid 2%.  The affordability for any buyer right now is incredible!  Their dollar goes so much further, which is a blessing since the housing prices are soaring.  Yet, I believe the rates will rise this year.  It is typical that rates raise in the spring.  I believe our administration will use this typical situation to force the higher interest rates in the spring and continue to rise until we are back to 4%+ by end of the year.  So what does that do to the real estate market?  Well, the buyer that could afford a home at $350,000 today will only be able to afford a home at $300,000 by years end.  Therefore, buyers should do everything they can to purchase now, pay a little more if necessary to lock in the low prices and purchase a larger home.  So start your new search here

Another factor is the fear factor.  What will the new administration do to affect real estate?  What laws might they enact that could affect us?  What about the stock market?  How will that affect anything?  I can foresee increased taxes when it comes to the purchasing of real estate.  Lawmakers have been trying to increase them here locally for years and I can foresee that happening either locally or nationally, so Maryland is already an expensive state to purchase real estate and I believe we will see increases there with this new administration.  I also foresee quite a bit of relocation on a more massive level.  I feel we will see an increase of movement from states like New York and Illinois to our state, while I also see mass movement of Maryland to Florida, Texas or the Carolinas.  That will keep our market strong and stable this year, but I do feel the market will stabilize by the end of the year, and turn more to an even market.

Another factor to consider has to do with the foreclosure market.  The new administration controls the financial markets that handle the mounds of foreclosures sitting out there not allowed to be sold.  Once those foreclosures enter the marketplace, it will start to drive prices down again, increase supply and start to move away from a seller's market.  If you are considering selling, it is better to be ahead of that curve.  I believe the seller's market will peak in the next few months.  If you want to know what your home is worth today, click here!   Once the foreclosure doors open, we will see a big dip in home prices.  It will rebound, but maybe not for another year or so.  Again, if you are thinking of upsizing, I would do that now while you can still get great rates.  If you are willing to gamble, or not looking to make a move for several years, be the first to know what homes have gone under contract or sold and the sales price and how they compare to yours by clicking here to stay on top of the market in Your Neighborhood.  

We don't want to you to be fearful in your decision making process.  We are here to provide you all the available information so that you can make your best decision.