It’d have been close to impossible to foresee almost all events that happened in 2020 with no clairvoyance. In the realm of real estate, who could have thought that a worldwide pandemic, widespread unemployment and shutdowns citywide would have poured more fuel to the existing hot housing markets that span the country.
Nevertheless, with more than a million people in America vaccinated in 2 weeks, economic professionals are considering what will likely happen in 2021 as we gradually go back to normalcy. Finally, there is a little light at the end of the tunnel. But as soon as we are in the clear, it will take a whole lot of time to repair the collateral damage caused by COVID-19.
The good thing for investors is that they should expect more of similar or better when it comes to real estate in 2021. According to the chief economist at Redfin, Daryl Fairweather, there will be a continuous stronghold in the housing sector while other aspects of the economy go back from the recession caused by COVID-19.
First prediction: The rates of mortgages will stay at a historic low of 3 percent. Within the next twelve months, 30-year-fixed rates will likely tick up. If that happens, it will be insignificant and slow.
Second prediction: There’s going to be more sales of houses compared to any other year since 2006, although there’ll be slow growth of the price. There’s a decline in new listings in 2020 compared to 2019 — particularly in places where the COVID-19 was high. But as we see a hopeful decline in the number of coronavirus cases because of the vaccination. Redfin believes there’ll be listings for more home sales and a more balanced market.
Third prediction: There’ll be the building of more new homes compared to any other year since 2006. Because of the low-interest rates, homebuilders have been incentivized to borrow money to construct buildings; and people rarely built commercial buildings, which made it easier to meet land, materials, and labor demands for new houses.
Fourth prediction: This is the highest rate at which Americans have relocated in the past sixteen years, and this will assist the economies of places that are affordable such as Pittsburgh, Cleveland, and Buffalo.
Fifth prediction: The rate of homeownership will be as high as 70 percent, and this is the first time it will happen since 2005. Employees who work from home are beginning to ditch costly rentals for homes that are cheap in the suburbs.
Sixth prediction: Tampa, Tucson, and San Antonio will be the top housing markets as the main southern cities such as Miami, Phoenix, and Austin become too expensive for people to afford.
Seventh prediction: Costly cities will continue to invest in their lifestyle and culture to attract tourists and residents. As inhabitants leave costly cities because of increased real estate prices, places such as New York and San Francisco will take a hit inevitably — particularly when it has to do with tax revenue.
Eighth prediction: Almost every homebuyer is going to make an offer on any home sight unseen. Looking at the present heated markets that will become hotter, the thing is that homebuyers have got no choice but to rely on online tours.
Ninth prediction: In 2021, new price era competition for agents of real estate will be ushered. Transparency of fee will provide both sellers and buyers a leg up when it has to do with negotiating commissions.
Tenth prediction: All things that are associated with selling or buying a house are going to be provided at one-stop-shops.