We are ringing in the New Year with open arms. Hello, 2021, we’ve been waiting a long time for you. What a year it has been! With so much that happened across the country, many might be wondering how it’ll impact real estate trends in 2021. But, what’s next?
In 2020, the seasonal pattern for home sales and other metrics were thrown into disarray by the timing of the coronavirus pandemic, as well as the shelter-at-home orders across the country. The housing market had quite the year with record-low mortgage rates and a sudden wave of relocations that were made possible by an increase in remote work.
Although we faced many hardships here in 2020, there is much to look forward to as we enter a New Year. After all, a New Year is the perfect time for new beginnings, and as we look ahead at the real estate market, we will begin to see housing trends and patterns return to normal, or what we might refer to as a “new normal.”
Key Factors in 2021
2021 will be focused on Millenials and their mark on the housing market, who now outnumber both Baby Boomers and Gen X.
In 2020, we experienced a very delayed buying season. The year started off slow with home sales but gained its momentum in the late Fall. According to Realtor.com, 2020 home sales are expected to finish .9% higher than those of 2019. This can be accredited somewhat to the sense of urgency to claim and take advantage of record-low mortgage rates, but also the increased availability of homes on the market towards the year’s end.
According to Realtor.com…
“We expect home sales in 2021 to come in 7.0% above 2020 levels, following a more normal seasonal trend and building momentum through the spring and sustaining the pace in the second half of the year.”
An interest in locking in a low rate during this time may be enticing for those in the home selling arena. Either way, we can expect to see a rebound of home sales in 2021 to make up for slow-growth in 2020.
Although we are hoping to see an increase in home sales in 2021, they will come at a substantial price increase. Fast-rising prices will create a bigger barrier to entry for the many first-time buyers for Millenials and Gen-Zs who don’t have existing home equity for down payments. Not to mention, they will dominate the housing market.
The market is expected to be more seller-friendly, although according to Forbes, “Buyers will still have relatively low mortgage rates and an eventually improving selection of homes for sale.” With relatively low housing inventory to start the year and low mortgage rates, high prices are to be expected out of the gates for 2021. Buyers will need to react with a sense of urgency if they want to lock in a low rate before home prices increase even more in the upcoming year.
All signs point towards 2021 being the year for sellers all around. With an influx of buyers and a shortage of homes for sale, sellers have the upper hand with home prices and the advantage of selling their homes relatively quickly.
If interest rates stay low, buyers will be more motivated to buy sooner than later.
Whether you’re buying, selling, or just want to talk about what 2021 is going to bring in real estate, don’t hesitate to reach out to your team at Moayyer Real Estate Group. Take advantage of the current trends by partnering with professional real estate agents in Grand Rapids. Our team is dedicated to serving you in any way we can as we enter a New Year.