Congratulations, readers! We made it through 2020, Happy New year! As we look ahead into 2021, it’s easy to be discouraged by the ongoing pandemic, social unrest, and environmental issues, but don’t fall prey to that negativity. There is a light at the end of the tunnel, and it’s getting closer and closer with each passing day. In fact, experts are forecasting 2021 to be a year in which all of us in the real estate world can be excited about. Homeowners have had close to a year to determine what they truly need in their homes to keep them there, which means 2021 may be a big year for real estate changes for homeowners from all walks of life.
So, why should we be optimistic about real estate in 2021?
1: Continued lower interest rates
The latest interest rate projections are encouraging. Recent data from Freddie Mac predicts that interest rates for a 30-year fixed-rate mortgage is expected to remain at or near 3% for the next year. With lower rates, homes will continue to be more affordable, which will drive demand for housing throughout 2021.
With millennials becoming more and more interested in homeownership, this trend of lowering interest rates only stands to help the real estate market grow by providing more homeownership opportunities for younger generations. Who knows? Maybe being forced into showing houses virtually has helped the market too—making it more accessible to a larger audience.
PREPARED BY THE ECONOMIC & HOUSING RESEARCH GROUP
2: Future homes sales are expected to grow
As the economy slowly improves, and interest rates remain low, we can expect to see an increase in home sales. In fact, chief economist at realtor.com says, “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.”
It makes sense. Many homeowners have had to work from home, and many of them have had that change become a permanent one. After almost a year, many homeowners have come to the realization that their space isn’t adequate for their needs, so they’re looking to find a larger space, or to relocate completely since their jobs are no longer requiring them to be in-office. Whatever the reason, this means home sales will continue, so get ready!
3: Improving economy throughout the year
The economy is expected to gradually improve and pick up throughout the year. Experts at the Congressional Budget Office have predicted that GDP in 2021 is expected to grow by 4.2 percent on a fourth-quarter-to-fourth-quarter basis. They also predict that consumer spending will grow by 1.2 percent on a fourth-quarter-to-fourth-quarter basis.
These are all exciting trends to keep an eye out for, and to be prepared for. Real estate is always fluctuating and updates are hitting the news cycle on a daily basis. It can be a lot to keep track of, but not for us, it’s our bread and butter! If you’re looking for assistance running a property you manage, selling your home, or with any real estate needs—we’re here for you. Reach out to us for a free consultation, and let’s see how we can work together.