Realtor.com recently released its 2021 Housing Marketing Forecast and Predictions report, which looks back at 2020 and offers insights into what to expect for the 2021 housing market.
The report looks at real estate nationally and what to expect in 2021. Home prices are expected to continue climbing nationally as demand continues to outpace supply, with prices rising just shy of 6% nationally. Lower interest rates will also play into the need but are expected to rise to around 3.4% by the end of the year. With home values continuing to grow, the higher interest rates will make affordability an issue for buyers.
One of the significant shifts between this year and 2021 is returning to a traditional “seasonal” market, where the bulk of home purchases will take place between the spring and summer months. The “frenzied” sales activities will slow, especially as interest rates rise and more inventory enters the market.
Another significant change is the rise of the millennial generation, who dominated the entry-level market for years. According to the report, millennials are transitioning to “trade-up” buyers as they have kids and need more space. The Gen Z crowd will take over as the primary entry-level home buyers.
Home sales are expected to increase as more homes become available now that we’re working past the pandemic. The report anticipates a healthy rate of growth of around 7% is for home sales in 2021.
Listings are also expected to showcase home features that support remote work. Home offices, quiet yards, proximity to coffee shops, and other businesses that offer high-speed internet connections allowing remote workers the ability to take a break from the home office will be more prevalent.
Suburban migration is expected to continue. With more employers allowing people to telecommute, many people are taking advantage of such opportunities and are choosing to live further away from the office.
Naturally, the economists at Realtor.com do caution that COVID and a potential recession could affect their predictions for 2021.
We know that the Treasure Valley Housing Market will continue to be hot in 2021, especially for people looking to sell their home.
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