The US housing market in 2021 is one of the strangest markets in history. The recent pandemic has had a drastic effect on the current market. The Federal Reserve policy of printing a lot of money has also done the same thing. Only time will tell what happens, but several signals point to an impending collapse. The rapid printing of money is also causing problems with inflation, which is pushing more people to invest in real estate to avoid that inflation. This is good news for real estate companies in central Florida because they are benefiting dramatically. The final signal is that people are fleeing states with high taxes to areas like Florida. Read below some of the other signs for what the housing market will do in 2020.
Low Rates Keeping Things Solvent
As it stands, almost anyone can get a loan right now. The mortgage rates are currently some of the lowest they have ever been in history. That has meant a massive number of people taking out loans and buying properties. Most properties are now purchased without the person even going to take a look. There is a massive amount of cash pouring in from overseas that is affecting certain markets as well. All of these problems affect the supply, which is causing a massive effect on housing prices.
Inventory Is Also Low
Another factor is current inventory. Because of the availability of cash, we see low inventories in the majority of areas. That means that people still have a massive appetite for properties. The effect of this is the market is booming as it has never boomed before. Many people theorize that it could potentially crash, but it shows no sign of crashing in the next one or two years. However, the reality is that it should crash in the next one or two years. That is what logic would dictate. The severe lockdowns have crushed the economy, and many people will not be able to pay their mortgage when it comes due.
The Effect of the Pandemic
As mentioned above, the pandemic has been excellent for real estate companies in central Florida and other states where people are moving to. However, it has been bad for the majority of other people. Most people have lost their jobs due to the lockdowns, and it looks like those lockdowns are coming back in the future. The effect this will have is to cause many people with mortgages to lose their job. However, the historically low-interest rate is one of the many forces pushing back against this massive job loss.
Where Things Are Trending
Only time will tell where things go, but it seems like this booming market is heading for a massive crash. Will it be in 2021 or 2022? No one really knows, but it will come, and it will be massive. It is impossible to sustain an economy where money is printed, and no one works. It is also impossible to sustain the low rates the Federal Reserve has set. Because of this, it is only a matter of time until the massive crash comes to the US housing market.