2021 Real Estate – Will we see this real estate bubble pop?
Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC’s of Property Management, and has an upcoming book: “ABCs of Buying Rental Property. What should you expect for real estate and house prices for 2021? Is the crash still coming, or should you buy a home right now?
*One should always consider that this is just one persons opinion! DISCLAIMERS: Any information or advice available on this channel is intended for educational and general guidance only. This website is not be liable for any direct, incidental, consequential, indirect, or punitive damages arising out of access to or use of any of the content available on this channel. Consult a financial advisor or other wealth management professional before you make investments of any kind.
2021 Real Estate
One of the biggest concerns I have is for people that are saving large amounts of money right now in a savings account ready to purchase a property. or maybe those people have just sold a property and a holding that money they’re ready to buy their next property. These are the people that are most at risk at present as housing prices are going up, at the same time the value of the money is going down due to inflation.
The Fed has openly said that they’re not concerned about asset bubbles ahead. And my question would be why the heck not? Why would you not be concerned about asset bubbles when it’s so clear the asset bubbles are forming. How else would the stock market be reaching all-time highs during a financial crisis. How else would the housing market be booming during a time when unemployment is the highest it’s been in a long time?
I mean am I the only person thinking rationally here. Isn’t it obvious what’s going to happen when all of the stimulus measures end and this new stream of money that we are adding dries up. Why also are house prices going up? Inventory, forbearance, interest rates, building costs have risen dramatically. New home building is also very slow at present due to the crisis, with a number of delays. As well as delays on getting materials. Supply chain disruption. Expect about 6 months before the next wave of new homes come to market (so with delays, roughly the Summer which will be peak time for the selling market).
Houses are also selling twice as fast right now as they have done previously. This creates a buying frenzy with people paying over and above the asking price to secure the house. Interest Rates: Expect mortgage rates to go up this year by about 1% or thereabouts, we could see a 2% rise, that’s also possible. It all depends on a number of variables that are outside the scope of my knowledge.
Interest rates are going to stay low throughout the next year. Jerome Powell has already made it quite clear that he will not be raising interest rates any time soon. This gives us a clear indication that house prices will stay high through at least the next 6 months. The next thing is home value increases. Many experts and housing associations are predicting an 8% rise in 2021, however, I think it’s a lot more accurate to predict a month by month increase, because we could see a crash later in the year, it’s not certain.
In case you missed it, here is a link to my opinion about the crazy real estate market.
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