Will there be a real estate crash in 2021? A majority of experts do not think so.
“People say we’re in a real estate bubble, but I don’t think the term real estate bubble is the right description, ”said Tabitha Mazzara, director of operations at mortgage lender MBanc. “A bubble is something that will burst. I see it as a phase. The market is cyclical, and there may be a slight fix, but it won’t be as bad as what we’ve seen In 2008. What is different today than what we saw in 2008 is that the people who are eligible for loans are actually qualified. They are solvent. Were in the situation we are in now because of simple supply and demand.
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Erik Wright of New Horizon Homebuyers has a similar opinion. “Personally, I think the factors influencing our current market are very different from those in 2008,” he said. “I expect the market to start to cool, but this will be more of a plateau than a crash. However, I’m still looking for how I can be prepared in case something serious. would happen and we were experiencing a real estate crash. “
So what should you do if you are planning to move into today’s housing market? What is the answer?
“Trying to prepare for a possible real estate crash is a bit like trying to prepare for a possible house fire, ”said Clay Risher, investment professional and columnist for Nareit, a trade publication for commercial, residential and mortgage real estate investment trusts. “All you can do is tone down risk as much as possible and hope for the best.
Whether you’re looking to stay put, sell, buy (or sell and buy), here are tips from seasoned industry experts to help you avoid the negative effects of a possible real estate crash in the future.
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Advice for homeowners not looking to sell
If you’re not looking to sell your home, you might be wondering if you should consider refinancing your home to save money over the life of your mortgage. Here’s what industry experts are saying.
“If you already own a house and you don’t plan to sell, you should still refinance now for insanely low rates, allowing you to sit back tight and withstand any storm that hits the market, ”said Dawn Pfaff, president of My State MLS, a national MLS and referral network.
Peter Murray, owner of Murray Steel Buildings, a residential and commercial construction company, supports Pfaff’s opinion. “Even if you bought your house in the years, you should spend time looking at mortgage refinancing rates. The last 12 months have shown mortgage financing rates that are lower than they have ever been. Depending on your financial situation, you may be able to refinance at a rate of around 2.5% -3.5% which could save you tens of thousands of dollars if not more in a 30 year mortgage. This doesn’t hurt to shop around for refinancing quotes – I would recommend looking at least three different providers and comparing prices.
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Tips for homeowners considering selling
Maybe your home has temporarily increased in value due to the current market and you are tempted to sell it now to reap the benefits that will not be available forever. Here’s what the experts are saying.
“If you are planning to sell in the next few years, now is the time; the market is hot, interest rates are low and you will get the best deal for your home, ”Pfaff said.
However, Omer Reiner, licensed real estate agent and president of Florida Cash HomeBuyers, LLC, cautions against Pfaff’s advice:
“If you are a homeowner who is considering selling his property at take advantage of high selling prices, remember that selling high too goes hand in hand with a high buy, ”Reiner said. “It’s better to secure your next life situation before you put your house on the market to avoid getting stuck.
One way to sell your home without having to buy another right away is to rent until the market calms down. In the meantime, consult with a financial advisor and tax professional to find out how best to manage the profits you make from the sale of your home.
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Advice for future home buyers
If you are considering buying a home, Murray recommends avoiding overpaying if possible. “It goes without saying that the accommodation the market is currently extremely competitive, with many homes for sale receive 10 to 25 cash offers, ”he said. “It usually means that you will pay too much in order to remain competitive. If you look at your house dreams, maybe it’s worth paying too much to get your offer accepted, but if it’s not your forever home, paying too much be immediately in the equity hole once the market has finally equalizes.
Eric Jeanette, owner of Dream Home Financing and FHA Lenders has a similar point of view:
“If you are a home buyer, consider waiting to buy,” he said. “Rent for a year and watch the market if you want to buy a house only to see its value drop in a market correction. However, if you are buying a home that you plan to live in for the next 20 years, today’s purchase price really shouldn’t be a concern. Just buy the house you prefer to live in today.
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Overbought is risky, and one way to avoid overbought is to follow Pfaff’s advice. She believes that you should create a strict home-buying budget before doing your home shopping and stick to it to avoid financial exhaustion.
While this could mean that you won’t end up buying a home just yet, you still have other options, such as refinancing, leasing, or just staying in your current living situation until the market. stabilizes.
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Last updated: August 4, 2021
This article originally appeared on GOBankingRates.com: Should You Prepare for a Housing Market Slump in 2021?