Whether you're a home buyer or a home seller, you're probably wondering what the market will be like in 2021. Remarkably, 2020 proved to be an excellent year in the world of real estate sales, even with the pandemic. But will that positive trend continue? Have no fear -- all indicators show that the 2021 housing market is far from being a bust. Here are some compelling reasons why the housing boom will continue into the new year.
Suburbs and small towns are hot
Fueled by a desire for more space amid the pandemic, homebuyers are flocking to less urban areas. Demand for housing is exceptionally high among affluent homebuyers who can work remotely. Many are buying vacation homes with resort-like amenities and enjoying those perks, not just during vacation but all year round. The CEO of Redfin, Glenn Kelman, speaks to that fact in this CNBC article that touts "absolutely insane" demand for housing in 2021.
Schools take on new importance
In an effort to obtain the best education for their children, more parents are shifting their kids to other schools and school districts. In fact, many are choosing to move their children from public to private schools. Why? Because most private institutions have appealing advantages -- like smaller class sizes, larger outdoor spaces for social distancing, the means to upgrade air filtration systems, better access to COVID-19 testing, the ability to hire additional staff, and more.
Interest rates are low
Mortgage interest rates continue to be at historic lows. Even better, the Federal Reserve does not intend to raise interest rates anytime soon. We see signs that those rates may fall even lower in early 2021. But, we all know the low rates aren't going to last forever (especially if COVID19 vaccines help bring the pandemic to a close in 2021.) As a result, many smart buyers are taking advantage of low rates now.
Buyers are confident
After the initial lull in home sales from 2020's springtime lockdown, recovery has been swift, especially as the economy continues to reopen. That, plus improvements in the job market, have helped boost home buyer's confidence. And while for-sale home inventory continues to be low, buyers are pouncing on homes they love, even at higher price points.
Sales activity is high
While home sales activity typically slows down during the winter months, that's not been the case in 2020. Buyers are purchasing properties well ahead of last year's pace -- a trend that's predicted to continue into 2021. What's more, housing supply trends indicate that sellers are returning faster in high-end housing markets. More homes listed in wealthier demographics equates to a more robust housing market now and into the new year.
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