Market Predictions for 2021
I spent the morning doing some research on what we can expect from the housing market and the Real Estate Industry in 2021. Obviously, 2020 has taught us to take any kind of “prediction” with a grain of salt because if we have learned anything this year, it is that nothing is guaranteed. At least that is true in my case. It is a little frightening to know that I have transitioned into a field where not only are my earnings 100% commission based with no reliable salary or benefits, but the prosperity of the industry itself can be volatile and unforgiving.
Many of the articles I read this morning were exceptionally long and filled with industry jargon, so I will try to condense and simplify what I learned for you!
First biggest question – will the Real Estate market just collapse in 2021? All indications point to no. Whew!
Let’s take a look at some trends to think about:
One continuing trend is that inventory does remain low and increases in building supplies has led to an increase in building costs and therefore home prices are going up.
Another trend worth noting is the prevalence of working remotely will be something that will continue. Many companies have discovered the value in the work from home employee and this trend is leading more people to move out of major cities, as well as a desire for more SPACE inside the home. “Open Concept” floor plans are starting to fade slightly in popularity in favor of divided space for specific activity.
Record low mortgage rates of 2020 may begin to slowly and steady begin to climb, though that rise is expected to be moderate and sluggish – it would still be wise to buy sooner rather than later. As rates increase, and costs increase so do home prices. Some research predicts that home values will increase by 3.6% in the next three months, with the next forecast that home values will increase by 10.3% in the twelve months ending November 2021. That means almost instant equity for new home buyers!
Younger Millennial and Gen-Z buyers are expected to play a growing role in the housing market, but fast-rising prices could create a barrier for the many first-time buyers who don’t have existing home equity or enough savings for a large down-payment. Younger buyers need to consider investing in their ‘starter home’ to get started on gaining that home equity. Save and earn at the same time instead of waiting and wasting your money on rent.
In short, the US housing market is strong and in fact, it continues to play an important role in the country’s economic recovery. While that is comforting, the time to buy is NOW! As home values rise, so do home prices and affordability begins to become a major factor in your potential move. For the best home for your money and the most space in your desired location, call me NOW and get started on your search!
SELLERS – Yes, the value of your home is rising, but remember that your buyers’ budgets may not be. As the value of your home increases your pool of buyers may be decreasing. Also remember, while your value is rising, so is the price of that dream home you may be thinking about purchasing.
BUYERS – Don’t Delay! Mortgage rates are low and home prices will continue to rise. Call me now to start looking for your new home!