This is the time of the year when everyone traditionally makes predictions for the following year. Of course, 2020 has been far from a traditional year. It has proven just how futile predictions can be. Everything can change within a few weeks. The world looks completely different to what we all expected.
However, we can try our hands at some sort of assessment of what next year will look like in the Texas realty business. Some of the lessons we have learned in 2020 will follow us into 2021, and certain changes are here to stay.
Some of the biggest lessons this pandemic has taught us have been with regards to renting. Let’s take a look at how this might impact the realty industry for good.
Higher barriers to homeownership in Texas
Property values have dropped because of the pandemic, and Texan property has never been as expensive as in certain other states. However, you would have to be very naive to think that this makes homeownership any more accessible. On the contrary, property values are so low because buyers are few and far between.
People who may have intended to buy homes have had to put off that dream indefinitely after losing their jobs or facing pay cuts.
But even those who haven’t suffered any financial damage might hesitate before buying a home. They might consider keeping the money they would have spent on a deposit in the knowledge of just how quickly things can go south. Not only might their property lose value, but they could also find themselves in dire need of their savings.
Although property might seem like a bargain at the moment, it is not necessarily one worth snapping up for the average Texan, with the economy only beginning to recover.
A desire for flexibility
Potential homeowners in Texas who have come through 2020 unscathed have been left with a desire for flexibility. When everything might change from one day to the next, it is wise to be in a position to adapt your lifestyle accordingly.
If you own a home, this is incredibly difficult. You cannot simply move into a cheaper or smaller place. You cannot easily move to another state for whatever job you can get. On the contrary, because finding buyers becomes so difficult in times of crisis, it is harder than ever to sell your house in a pinch. The risk of repossession is far too high.
This is another reason why people may choose to rent rather than buy. Yes, they will have to give up on owning their own home. However, they are not stuck if things go from bad to worse.
Benefits and protections for tenants in Texas
The amount of rent a landlord can expect to charge has dropped as well. They still need to make a living off their property, but the reality is that people cannot afford what they once could, and that finding someone to pay 2019’s prices is increasingly difficult. It is a good time to sign a lease.
Furthermore, as a tenant, you can organize protections that ensure you are secured from property damage and liability. Renters insurance is only becoming more accessible and better-suited to today’s world.
See more here about getting renters insurance in Texas. It makes it possible to protect yourself as effectively as you could if you owned your home.
Loss of rental income
Buying a home has traditionally not just been about finding a place to live. Rather, owning property gives you the potential to earn income. You can rent out your home while living somewhere smaller, or rent out a room to travelers.
In 2020, we learned that rental income is far from assured. People who relied on international travelers for their income have had to contend with empty properties. Landlords with usually reliable tenants have had to accept a loss of income or consider evicting tenants at the worst possible time.
Buying a home with the intention of earning income is no longer such a good idea, especially with the low rental rates people in Texas expect to pay. Within a few months, we will probably see the world returning to a semblance of normal, but that is not assured. There is no way of accurately predicting when property owners can expect their income stream to return.
The world has changed drastically in 2020, and it would be foolish to pretend we could predict 2021. However, the lessons we have learned have taught us that stability is an illusion. Homeownership is not as attractive as it once was, and renting may well be the new buying.
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