Are you thinking about buying a new home in 2021? Back up a bit, potential home buyers! As we move on to the next quarter of 2021, things are getting fierce in real estate. Understandably, everyone is eagerly renovating, re-constructing, and relocating during the pandemic. That said, we are currently witnessing a global spur in home sales which are approximately 20% higher than the previous year.
Where it might be a good idea to hire one of the best building inspectors in Auckland before saying yes to any property, let us revert to the basic question that needs to be asked before making any purchase – can you buy a new home right now, in 2021?
If the answer to this question is in the affirmative, the next question coming your way is whether you should buy a new home, given the high prices? We know that personal preferences always play a crucial role in such decisions, but sometimes, we have to step back and look at things rationally.
Making rational and well-thought-out buying decisions is especially important in 2021 because this year will take more courage than ever before, especially if this is your first time buying a house. As a first-time home-buyer, you need assistance with down payments as that can be quite a challenge in the fast-moving market in 2021.
Suppose you are financially all-set to make the purchase. Here are a few things that you need to know about the home-buying season in 2021.
Boost in Prices
You might be familiar with the trend that home prices spike up to 10% annually. Today the fundamental home prices are not the same as they once used to be, including supply scarcity, subprime mortgages, interest rates, etc.
That said, as a home-buyer, your focus should be not so much on the purchase cost of the home. But, you ought to focus on your monthly costs, such as property taxes, mortgage, insurance, and home maintenance.
As a rule of thumb, you need to ensure that you don’t go poor at the end of each month after paying all monthly costs that accompany a home purchase. If you want to save yourself from potential disappointment, it is recommended not to view your home as a financial investment as it is hardly liquid.
Fluctuating Housing Markets
As a reaction to the ongoing pandemic, many economies and global markets are collapsing and changing while adapting to internal and external factors. If you want to assess a city’s or town’s strength in real estate, you ought to assess local businesses’ employment opportunities and success regarding growth.
Today districts are dealing with the challenges of re-opening schools and local businesses, which is giving rise to a number of conflicts and issues between the authorities and local residents. That said, no market is stable in the face of the ongoing challenges, including the housing markets. It is essential to do extensive research and keep one’s options open before making a final purchase.
Strong Credit is Mandatory
Since several sellers receive a plethora of good offers simultaneously, it has become mandatory to own a pre-approval letter in the absence of which another potential buyer can beat you up. The pre-approval letter exhibits a conditional bank statement indicating how much loan the respective bank is willing to pay.
Cash is king – speaking of which, a strong credit is mandatory, especially if you are fishing for the lowest interest rate. In the absence of strong credit, it might be mandatory to set aside some time and build up your credit card score so that you appear more appealing to potential sellers.