While many sectors of business suffered due to the pandemic, real estate was not one of them. In fact, 2021 home buying trends show a record-setting real estate boom in multiple markets across the U.S. Residential sales are particularly strong in the Southwest. The option to work from home and historically low interest rates has spurred a frenzy of home buying in 2020 and the industry experts are predicting this trend to continue through 2021.
As we enter April, industry indicators show three key post-pandemic home buying trends to spot for the remainder of 2021:
Leaving big cities
As we mentioned earlier, the pandemic forced many employees to work from home. This change in structure led many city dwellers to reevaluate their living situations. Why pay high rent for a small apartment in a downtown area? The home buying trend in suburban vs. urban areas has people moving out of cities and looking for homes with more space and opportunities to enjoy the outdoors. Home buyers are actively looking for larger homes, with space for a WFH set-up, an at-home gym and/or craft area and room for home entertainment.
According to National Mortgage News, Las Vegas, Nevada ranks 10th in the best places for home buying in 2021 and Phoenix, Arizona ranks 2nd in their report for the hottest housing markets in 2021. In contrast, the housing market in New York, San Francisco, Los Angeles and Philadelphia are all underperforming nationally.
Changes to floor-plans
Not only are home buyers running to the suburbs for more space, they are also seeking specific floor-plan layouts to accommodate a new set of priorities and needs. According to Pure Wow, first-time home buyers now prefer a closed concept floor plan that provides a separate home office space. Today’s home buyers are wanting separate spaces for homeschooling, work, and other activities now being conducted from home.
Additionally, there’s greater demand for features such as hot tubs and pools. More homebuyers are looking for an outdoor entertainment experience for the family to enjoy. Outdoor exercise is another big trend that is expected to remain. Homes with space for an indoor gym or dedicated outdoor space for working out add value.
While these trends are expected to stay throughout 2021, which home buying trends will be more long-term.
Although demand for homes is strong, there are changes in a home buyer’s budgets. According to Forbes.com, 63% of homebuyers lowered their budget by $28,400 (on average) due to financial challenges. However, the historically low interest rates are providing home buyers more purchasing power than ever before. With buyers searching for homes in lower price points, this trend has prompted growth in less expensive regions. As a result, demand for starter homes is high and generating offers above asking price.
As long as inventory and interest rates remain low and the ability to work from home is an option, homes in less expensive markets will remain “hot”.
Our team at Landmark Title works closely with Realtors and brokers in the residential and commercial real estate space in Arizona and Nevada. If you have a residential or commercial real estate transaction and need an expert in escrow or title services, we are available to answer your questions today.