Real estate experts believe that Singapore and the rest of the world may be in for a major downturn in the next couple years, which could lead to fewer home sales in the 2021 calendar year. The number of existing home owners looking to sell their homes has dropped off significantly from its highs of the past, according to national and state statistics. Meanwhile, there are fewer first-time home buyers, and those who are buying homes are not as enthusiastic as they were a few years ago.
While there is no clear indication of an impending home seller’s market, the drop in overall housing activity may lead to fewer home sales in the future. One indicator of a potential decline is the fact that mortgage loan applications have steadily increased over the past five years, but only half of all applicants are approved. This increase may be caused by tightening lending standards, or it may simply be a reflection of the fact that the home buying crisis has reached an all-time high.
In reaction to the increasing number of declining home sales, real estate professionals are calling for more aggressive marketing efforts in neighborhoods with high vacancies. One solution to this problem could be to target properties that are currently vacant, but that are also appealing to potential buyers. This strategy would require a change in traditional real estate marketing approaches. It would be helpful to explore this possibility, but it may not be enough to keep declining home sales from continuing to decline.
Strategies that include a focus on lower and more appropriate asking prices, while matching the selling price of comparable homes being sold, are likely to result in higher sales volumes. Another area where there may be scope for growth is in financing and closing costs. Real estate professionals can look to new options that they have not considered before, such as short sales and debt consolidations.
Even though interest rates have remained relatively stable or falling, there is still a need to reduce debt for homebuyers. This is important due to the large number of borrowers who have little or no collateral to fall back on. Homeowners may also need to rethink their shortlisting criteria in light of the weak real estate market. For example, sellers may want to widen the criteria for acceptable offers in order to obtain more offers for their properties.
The timing of making these changes will depend on the current market conditions. It may be too late to make changes by then, when prices have already begun to decline. Interest only mortgages are another option, homeowners should consider for borrowers who need a lower monthly payment. Interest only loans are a good option for homeowners who cannot qualify for a fixed rate mortgage, but who want to reduce their monthly payments.
Many real estate professionals believe that in the next few years, we will see fewer foreclosures. However, this might not be the case. In fact, the opposite could be true. Foreclosures occur too often in this market. Owners can get into a financial bind without realizing how much they have over their head. When they finally come to sell, the price they pay is usually far below what they expected.
New home sales are likely to experience a slight decrease, but it would be a welcome change from the sharp decreases experienced in recent years. With stricter lending criteria and lower prices, it may take a bit longer for homebuyers to find a property they can afford. Homeowners looking for a new home should remain patient as the market has not bottomed out. Real estate professionals should work closely with buyers and sellers to find the best deals in the coming years.
