It is December 2020. It is quite possible that no year has ever felt longer. It is also possible that you are so over it all that you haven’t had a chance to review what the major industry sources have projected for housing in 2021 – and that is more than okay. This week, Homes of Silicon Valley is pleased to present what real estate projections have been made for the new year via our ‘cliff notes’ edition. Links to the complete articles are included for further reading, or you can always contact us if something strikes a chord and you need help fine tuning it to complete your own market strategy.
*Click article titles to read full stories!
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HOUSING WIRE: Even With Low Inventory, Expect A Strong 2021 Housing Market
| Expect the housing market to remain busy through Spring 2021 with competition driven once again by a continued lack of inventory.
| With home prices rising, many homeowners who originally planned to sell within the next three to five years may now list their homes sooner.
| Rural locations may continue to increase in popularity as more people are working from home full-time.
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NATIONAL ASSOCIATION OF REALTORS®: 2021 Housing Market Forecast and Predictions
| Homes sales are anticipated to rise 7%, while home prices nationally are expected to rise 5.7%.
| Seasonal home buying interest is expected to normalize back to the spring and summer markets, with millennials playing a role as not just entry level buyers, but now move-up buyers too.
| Mortgage rates are projected to average 3.2% throughout 2021, ending by about 3.4% at year-end.
| Inventory is likely to improve on account of new construction and more sellers listing, but likely to remain ‘housing’s long haul symptom.’ The result is a more ‘hospitable’ market for buyers but still favorable for sellers as home prices hit new highs amidst a slowed pace of growth. Double digit price gains are unlikely to continue.
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FORBES: 2021 Housing Forecast: Sellers Will Still Have Upper Hand As Buyers Struggle With Affordability
| Inventory is expected to make a slow but steady comeback, which will give buyers some relief.
| Increasing interest rates and prices will make affordability a challenge throughout the year.
| Generation Z will start to compete with Millennial buyers for entry level homes; Gen Z may turn to markets with greater affordability with a greater interest in rural vs. urban settings.
| Days on market is expected to increase in comparison to the 2020 buying frenzy, but fast sales will remain in many parts of the nation.
| The biggest 2021 ‘wildcard’ is COVID-19: how much the virus will spread, how many further lockdowns we may see and of course… the vaccine rollout.
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CALIFORNIA ASSOCIATION OF REALTORS®: C.A.R. releases its 2021 California Housing Market Forecast
| A modest increase in existing single family homes sales of 3.3% is projected.
| State median home prices are expected to rise 1.3%.
| A favorable lending environment and a strong interest in home ownership will continue to motivate financially eligible buyers.
| Sluggish economic growth, pandemic uncertainty and stock market volatility may keep prices ‘in check’ and prevent home prices from accelerating ‘too fast’ in the coming year.
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REALTOR.COM: The Top 10 Housing Markets of 2021—Who Made the List?
In other notable news for 2021, San Jose is #2 on the list of Realtor.com’s ‘Top 10 Housing Markets of 2021.’ The industry defined the top markets as ‘tech hubs with strong job markets, state capitals where buyers can get more square footage for their money, and smaller cities that are affordable alternatives to the larger, coastal metropolises.’ While the median San Jose home price is among the highest in the nation at $1,199,050, buyers get more for their money compared to other Bay Area cities. As a comparative example, San Jose has more available land, more new construction and a lower price per square foot than San Francisco.
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Cheers to finding the good in the New Year and every day until then,
Mark
Mark Barber (Homes of SV, A Sereno Group Team)
408.290.0072 / mark@homesofsv.com
License: 01220031 / Equal Housing Opportunity