2021 Real Estate Market Predictions
Today we’re going to go over our residential real estate outlook for 2021, whether you're a current homeowner or looking to buy or sell a home this year, we've got something for you!
We don't have a crystal ball, but we have hard earned experience and love to keep a pulse on market trends. Today we will be discussing market predictions for 2021, what trends we see in home buying this year, and even how our new president relates to real estate. Our goal is to give you the information that we do have at this point, so let's dive in…
What We Know:
The Fed has indicated that rates are going to continue to remain low, meaning that it is still really cheap to get a mortgage this year. In simple terms it means that the interest rate to borrow money is super low, so it's just not as expensive to get a mortgage. Meaning you can get a more expensive house for kind of the same price that you would if your mortgage rate was a little higher.
A market indicator that is rolling over from 2020 into 2021 is low inventory. The amount of inventory on the market can really affect home prices, how competitive it is to get a home, and how much money you can get for your home as a seller.
You weren't allowed to be evicted if you were delinquent in 2020 so it was anticipated that would end in 2021 and as a result more homes would be hitting the market. Now with the Biden administration, it is likely that those are going to be extended kind of the moratorium on evictions in the ongoing pandemic. We're going to watch what the administration can do and what they will do in terms of policies that will affect inventory and particularly those related to evictions.
It's possible that there will be a fifteen thousand dollar tax credit for first time homebuyers, under the Biden administration. That could give a real boost to the market and help a lot of people be able to afford getting into homes that they haven't been able to because prices have skyrocketed.
Across the nation, we're still seeing a seller's market. This means that there are more buyers out there than there are homes available. So this just makes it a great time for you to sell you. It means you can sell more quickly and you can sell for a higher dollar amount.
What We Think:
As the vaccine rolls out people will gain more confidence in getting back out in the world, selling their homes, and moving. Which again, would result in more inventory!
A lot of decisions around home buying and selling this year is going to be job based. There was a lot of uncertainty around jobs in 2020 and coming into 2021 people are gaining more clarity on what their work life is going to be like. They may want more space now that they’re working from home or they may want to move state since a commute isn’t a factor anymore.
It will be important to keep an eye on your local government and capital gains tax changes! This could make more people want to invest in real estate opposed to other entities.
Exurb Moves
People seem to be moving for one of three reasons: space, family, and jobs. A lot of people are moving out to suburbs and a new term for us is “exurbs”, which means the smaller towns that are on the fringe of even the suburbs that are maybe even more rural exurbs. Lots of people are fleeing the city.
Most people are wanting more space of some sort. Even for our condo buyers, making sure that you have a balcony or somewhere that you can just go outside, that is your own space. And for a single family, a place to host people in a more safe way has become a huge priority. Due to the inability to travel we’re really seeing people more to be close to their families. We’re even seeing family based moves stemming from wanting to move to districts where their children can physically attend school.
Homebuyer Wishlist
One big thing we see homebuyers looking for is a home office, sometimes even two! It's been so interesting to see home offices advertised on a listing and to be shown as, “Hey, two home offices!” Even homebuilders are reimagining offices and not just one versus two, but the location that they are in the house, maybe putting them more toward the back of the house where people can really put their head down in their full time workstation. It's been interesting to see that evolve!
Another thing we've seen a ton is that the demand for pools is up like crazy. A lot of people used to feel like they were like a ton of work and not worth the effort. With being at home in 2020 people really came to love their pools, valuing having a little oasis, and an outdoor space to entertain guests. Especially not knowing when public pools and spaces like that will be available again has really made it a priority for some buyers.
Re-evaluating for 2021
Overall, we see people just reevaluating their home and making choices to make their house work for them better. They are seeing where their home is lacking and choosing to move to a home that is more efficient in those areas; whether it be the pool, to be closer to family, have an in home office space, or a better outdoor space. People are reevaluating due to 2020 forcing us to be more homebody focused and we're using our homes differently than we have in the past. We never could have predicted 2020, and we're all curious to see what 2021 will hold for the real estate market.
We hope this helps you wherever you are on your homeownership journey!
Until next time,
Brianna & Keelie