2020 sometimes felt like the year that would never end, but the holiday season is finally here and we’re only a few weeks away from 2021.
It’s been an unusual year to say the least – and the real estate industry was no exception. If you’re thinking about buying or selling a property in 2021, it’s important to understand how 2020 has changed the market and what the resulting trends will be as we look forward.
How 2020 Impacted Home Sales
In 2020, the seasonal pattern for home sales was thrown for a loop. Home sales paused briefly in the spring due to the pandemic and shelter-at-home orders, which typically is a great time for sellers to list a home.
When sales re-opened, buyers returned more quickly than sellers. Buyer demand was partly driven by historically low mortgage rates designed to boost the economy. As a result, the second half of 2020 has been a housing market frenzy with more home sales, higher prices and less time on the market. This has continued even into the holiday season, which is normally a time that favors buyers over sellers.
We’re leaving 2020 with a strong market for sellers but with low mortgage rates that appeal to buyers.
Real Estate Trends for 2021
While the last year has taught us to expect the unexpected, there are emerging market trends that both buyers and sellers should pay attention to.
- Low mortgage rates will remain. Most experts agree that low mortgage rates will continue, with Fannie Mae forecasting an annual average mortgage rate around 2.9 – 3.2%. This means demand will remain high, especially as more Millennials and Gen Z begin entering the housing market.
- Home sales will significantly increase. Areas with fewer COVID-19 cases per capita are seeing 60% faster growth in people listing homes for sale than other areas. As the pandemic hopefully gets more under control next year, there will likely to be a lot of new listings, with growth predictions of over 5%. This increase in home listings, as well as an increase in the number of newly constructed homes, will modulate the price growth we’ve seen this year.
- Virtual tours and shopping will continue. While buyers still want to view homes in person, the industry has made major advancements in technology that won’t be reversed. Namely, home buyers – especially from the younger generations – will be more interested in using technology to view homes, explore neighborhoods and research options online. Instead of going to many home tours, they can work with a real estate agent to carefully curate a list of their best prospects to see in person.
- Market will be fast-moving. Fast sales will continue being the norm in 2021, which is great news for sellers. For home buyers though, it can present challenges. Buyers will have to know exactly what they’re looking for, act quickly, and have their financial ducks in a row. If you’re looking to buy, especially as a first-time home buyer, working with a real estate agent will be crucial. They can help navigate a seller’s market, find properties quickly, and guide you through making your offer.
If you are interested in buying or selling a property in 2021, it’s best to work with an expert Realtor® who can help you achieve your goals. It looks to be an exciting year for the real estate industry, and I can’t wait to get started. Call me at 904-626-1551 to discuss your real estate goals!
