Here are the top indicators for 2021 that will affect the real estate market’s growth:
1. Ultra-low interest rates. They are historically low and should stay that way through the year. They are also fueling rising prices. Seldom - if ever - has there been a weak real estate market in a low interest rate environment.
2. Limited Inventory. Many areas around the US are experiencing shortages of several types of properties, especially more affordable entry-level homes. More buyers than sellers usually fuels a strong market but can influence volume.
3. High Demand. The demand to buy a home continues to escalate, fueled further by accelerated a desire to be settled in a place to call your own AND Millennials coming of age to buy.
4. Under-building. The US is under-constructing homes by MILLIONS.
5. COVID Vaccines. They are here and distribution has started. Millions will be vaccinated every month. There is now a clear path to significant relief and an end to the pandemic.
6. Stimulus Money. Trillions of dollars are already circulating globally and more is coming to further fuel the economy.
7. Elections. The election insanity of 2020 is over. By the time the run-offs are complete in January, we will have a better understanding of future direction in the Federal Government. Certainty has value.
8. Bonus Season. Yes, many people got bonuses at the end of 2020 especially in the financial and technology markets where some companies have BOOMED. This capital will fuel real estate markets.
9. Record Equity Markets. Not only do they make people richer, they make them FEEL richer. Moods often drive markets as much as money.
10. The optimism of Spring. Spring markets are often strong markets around the country. They fuel optimism and hope and renewal.
11. Decentralization: “People are moving into the suburbs and beyond. One of the greatest indicators is what renters are doing.
12. Remote Work. “Remote workers are on the move. Between 14 and 23 million plan to relocate due to remote working.
13. Upsizing. People want more high-speed internet, home offices, kids’ classrooms, more space to spread out and workout, etc. We’re going to have even more competition in the move-up market.
14. Proposition 19. This proposition allows the owner of a property who is 55 years and older to transfer their tax base anywhere in the State of California upon sale of their property. for up to three times starting April 1, 2021. Expect there to be more inventory hitting the market as long time homeowners take advantage of this.