As we take on the New Year and leave 2020 in the rearview mirror, we begin to embrace what 2021 has in store. Last year presented the real estate market with many challenges, but within those challenges, opportunity.
Seller's capitalized on a lack of inventory, while buyers had to get creative in a competitive landscape. A global pandemic was unable to cool down a hot market, adding to the rest of the intensity that the year had to offer.
As we look ahead to the next 11 ½ months, if you're considering getting into the game, there are a few things you should consider.
The Strongest Housing Market in 40 Years?
In a December report from Zillow, the online marketplace predicted that 2021 would bring the highest home sales growth in 40 years. With demand still high and economies in cities reopening, they expect 2021 to be a year like no other.
2020 saw a 6% increase in sales from 2019, and while 2020 was a strong year, respectfully, get ready for 2021 to blow it out of the water. A 21.9% growth total is forecasted this year, for almost a total of nearly 7 million homes sold. This increase would be the largest this country has seen since 1983.
Will the COVID-19 Vaccine Have an Impact on Housing?
With the rollout and growing distribution of the vaccine, a much-needed surge of energy could hit the economy, thus creating more confidence for home sellers. Not only that, but many sellers held off listing their homes in 2020, especially baby-boomers, in fear of COVID-19 exposure from open houses, showings, and more.
Receiving the vaccination will make them more likely to go ahead and put their property on the market—great news for buyers who have stayed sidelined due to highly inflated pricing caused by inventory lack.
Another thing to look out for in relation to the vaccine is cities' comeback across the country. When the pandemic initially hit, those that had the opportunity to flee the crowded cities did. Rental prices fell dramatically in places like New York City due to those vacating the city, creating an opportunity for those interested in city living on a tighter budget.
Mortgage Rates on the Rise?
A positive takeaway from 2020 was the considerably low mortgage rates. However, as the economy improves and the virus (hopefully) fades away, rates will likely trend upwards. The Mortgage Bankers Association projects rates to average around 3.3 percent, increasing from 2020's average of 3 percent. This could mean refinancing will slow down in the latter half of the year, but with over 20 million Americans with rates above 4%, expect refi's to continue to be a theme at least in early 2021.
Advice for Buyers
With prices still rising, slowly but surely, it may be tempting to continue to wait for the right time to get into the market. It's essential to keep an eye on inventory and look for that elusive deal because they are out there. While we mentioned that mortgage rates would see an increase compared to what the average has been of late, rates are still relatively low from a historical standpoint.
Advice for Sellers
Your strategy as a homeowner in 2021 varies depending on your circumstances. While the end of COVID may be in sight, working from home could here to stay. If your space is ideal for those arrangements, now might not be the time to relocate.
However, if selling is something you've thought about, buyers' competitive field was along to this year from last. Because of this competitive buyer field and a more robust economy, prices should increase beyond lasts year's highs, making 2021 a good year for sellers.
While 2020 brought instability, there are hopes across the nation that 2021 will bring the opposite. If you're considering making a move this year, don't go at it alone. Find a professional to stand by your side, no matter your goals.
Talk to a C21 Agent today to get started, and enjoy the New Year!