Real Estate Forecast 2021: Trends & Action Plan
The real estate forecast 2021 is something that a lot of investors are really wondering about and for good reasons. 2020 has been a year with unprecedented happenings affecting not only real estate, but life in general.
But what does 2020 have in store for us? Well, according to a lot of reliable sources (including the NAR or National Association of Realtors) the good news is that the real estate market is not going to crash.
What factors are a good indication of a positive real estate forecast 2021?
According to the NAR, “2021 could be real estate’s best winter ever.” Mortgage rates will continue to stay low through 2021 (may be raise to 3.4% by the end of 2021,) home prices will increase on average 5.7% nationwide and the existing home sales will increase almost 10%.
- Limited inventory due to higher demand will prompt for new construction and home sales. It’s predicted that new home sales will jump up to almost 25%.
- It’s cheaper to buy than rent. With the low mortgage rates, a lot of people are looking to buy instead of keep renting. Therefore the reason for the increase of demand for houses to buy.
- New buyers entering into the market to buy. The millennials are looking to buy instead of keep renting, since as stated above, it’s cheaper to buy than rent.
- Virtual technology. With the need to work remotely, even viewing properties remotely, the concept of a virtual real estate business has really been taking off. Apps, tools and resources to work and invest virtually have rapidly increased and been perfected in 2020, with new and improved technology expanding in the years to come.
- No bubble crash. We are not even close to the “perfect storm” that we had in 2007, which caused the real estate and mortgage industry to crash. According to the economists, we would have to see a drop in home prices of 30-50% together with at least 10 million mortgage loans in forbearance. Instead the home prices are constantly rising, plus the loans in forbearance right now are less than 3 million and shrinking.
Life will definitely never be the same as we know it. There is a collective new way to look at life, business and work. Remote working, working from home and using technology to cleverly help and facilitate conducting virtual investing, are trends that are here to stay beyond 2021.