Outlook: 2021 Real Estate
Every once in a while if I find myself watching late night television, I will come across an info-mercial where some person is offering to tell you what the future holds for you if you will simply call a particular phone number and pay for their services with your credit card. It is always great when you can have a crystal ball into the future, but that is difficult to do. I suspect that there were few people in early 2020 that would have predicted that a virus called COVID 19 would have had such a great impact on life not only in the United States, but also across the world. On this first blog post for 2021, here are a few things that it appears we will be seeing in this new year:
1. An increase in foreclosured homes- As many of you will remember, many mortgage companies gave folks out of work a forbearance when the pandemic began last Spring. During the year 2021, I believe that we will see some of those homeowners face forclosure on those homes as they are unable to pay up their mortgage payments. Some of these homes will come on the real estate market and will be available to prospective homeowners or real estate investors.
2. An increase in non-performing loans- While some mortgage lenders will take the homes back and sell the homes, other lenders will choose to simply sell the non performing loan that has a home as the collateral. If you invest in real estate notes, some of these loans will be available for purchase in 2021.
3. A change in mortgage lending requirements will bring an increase in creative financing- The pandemic also brought changes in the mortgage lending requirements. While interest rates remain low, the lender requirements have tightened such an increase in a needed downpayment, increase in credit score, etc. This will open the door for perhaps more creative financing options.
4. An increase in burned out landlords- As many of you know, some tenants have been unable to pay their rent due to losing income during the pandemic. At the same time, landlords have been unable to evict some tenants. I believe this will enhance the possibility of landlords wanting to sell their rental properties.
These are a few things that I see on the horizon in 2021. We will see what happens. Best wishes in your real estate pursuits.- RLW