What to expect in 2021-State of the Real Estate Market

Dated: December 13 2020

Views: 53

Market Updates

I wanted to share a state of the market update with you that a bit more far reaching than our typical local market updates.  Brian Buffini, who is a renowned business leader  & Dr. Lawrence Yun, chief economist for the National Association of Realtors, distilled current market trends and predicted what we can expect in 2021.

Dr. Yun, shared that he predicted home sales nationwide will rise 5-10% in 2021 due to various reasons including vaccine available, faster job growth and still favorable mortgage rates. There is also work from home flexibility, people will continue moving to larger homes. They are no longer content and may need office space or schooling space at home. Prices will continue rising, because of constraint inventory.  

Jerome Powell, chairmen of the federal reserve made a statement that no matter what happens in recovery, they expect to maintain the current 0 to a quarter percent target rate for fed funds through 2023! Eventually there is going to be inflation, however, For the next 3 years there interest rates are predicted to stay low.

What is the greatest hedge against inflation? An asset. An asset that can appreciate during inflationary times that can also have a fix low payment.  Real Estate is the greatest hedge against inflation ever built.

Now, People are moving from cities to suburbs and rural areas. Remote workers are buying homes in the suburbs, affecting demand in the cities. According to the Washington Post the pandemic has people trading in traffic for chickens.

Research shows 14 to 23 million people are now planning to relocate due to the ability to work remotely.

More than 20% of those who intend to make a move currently live in a major city and over 50 percent of that number plan to relocate more than two hours away from their present location. Rents are rising in some rural areas such as Memphis by 8.3%, Phoenix & Indianapolis are rising as well.  Rents are falling in New York City, by 4.6%, San Francisco, Boston and Washington DC as well. According to Joshua Clark, economist at Zillow big cities are losing demand because people are having a hard time finding jobs during the pandemic.

Now, get this, did you know that the Nasdaq is currently in negotiations with the governor of Texas. Imagine that! Some of the back office of the SEC moving to Texas, the stock market in Texas! Clearly there is a major shift happening in our country.

Employment, interest rates and demand are all critical for real estate.  

22 millions people have lost jobs, the fed had projected unemployment to be at 9.6%, the number has since been revised 6.9% currently, which is signaling a recovery.  Projection for the end of 2021 will be 5.5%. Which is really great news. 6% unemployment is considered Full Employment. Anyone who wants a job, has a job. So that covers employment. Next,

Interest Rates will be low, we went over that a few minutes ago. So we need more supply. Builders are challenged to keep up with this, as supply of their resources are limited as well as skilled workers. So, as I have been saying, it is a great time to sell. Now, mind you, this means your home still needs to be prices appropriately. Buyers are cautious and will not overpay. So these 3 items together mean that I am ready to keep rocking and rolling.

As a consume, what is the greatest hedge against inflation? An asset, specifically, An asset that can appreciate during inflationary times, that can also have a fix low payment. Real Estate can be just that, the greatest hedge against inflation ever built. So if you are looking for investment option, please let me know.

If you are looking at new construction, I would like to come along with you. I can help add value, including year 2 until 4 warranty that covers major system and appliance breakdowns. Most builders, however, require your realtor comes along during that very first visit. Message me, we can talk about that.

If you want more specific information about homes in our Greater Land O Lakes area please reach out. If you are looking for a realtor anywhere else across the country, I am happy to do the leg work for you and find you an agent that will provide at least my same level of service to you within my network.  Thanks for listing, talk soon.

https://youtu.be/tZCdP6vhpbw

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Linda Urban

Local Realtor specializing in connecting, connecting with buyers and sellers and connecting them with their next home. Utilizing the latest technologies and innovations including Virtual staging, twil....

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