This COVID pandemic has put everybody's lives and businesses upside down. The news has been telling us that we are not only battling the health issues brought about by COVID-19, but the economy is hit badly as well. Because of this, there's a lot of speculations if the housing prices will crash soon.
The housing market has proven to be solid amidst this pandemic. Surprisingly, home prices have risen - good news for the sellers, not so for the buyers. There are sectors in the trade that is saying that 2021 might see the prices dropping. Of course, this is just pure speculation, but industry experts say that home prices might drop if the COVID pandemic continues. But now that the vaccine is here, what is your take on this?
Why is this so? Economists are saying that the possibility of homeowners not being able to pay for their mortgage on time might result in delinquencies and ultimately lead to foreclosure. Before this pandemic happened, there has been a shortage of homes for sale because there was a demand for it. The law of supply and demand dictates that if there is a low supply and the demand is high, prices will always be higher.
Then the lockdown came, and the housing market was forced to a standstill. Sellers put off listing their houses as they do not know if the potential buyer will have the capacity to pay. Some buyers held on to their money because they do not know what is going to happen next. But still, even if this happened, the prices remained high.
Economists are saying that the possibility of the market falling is real because the federal policies that have been keeping the economy afloat have helped stabilize the housing market. Without these benefits like the CARES Act
might see many foreclosures in the country, just like what happened in the 2008 financial crisis.
We are about to bid 2020 goodbye. And all these questions about the housing prices crashing soon in 2021 are still pure speculation. It may happen, or it may not. Regardless, we will stand strong and weather this storm until it passes by.