Real estate market to slow?

Green Escrow | Real Estate News

Low interest rates, low inventory, high construction costs, a reluctance to sell, a surging economy, millennials looking to buy and many other factors are keeping the real estate extraordinarily hot throughout the entire country. Still, there are a number of indicators that the strong sellers market may be easing.

Higher interest rates may be coming sooner than expected as the Federal Reserve keeps a close eye on inflation. Buyer confidence that this is a good time to buy a home is dropping (4 percent in the last month) while pother buyers are giving up.

if the high construction costs and labor shortage continue the number of homes on the market will continue to decrease.

Bay Area realtors 2021 forecast

Green Escrow | Real Estate News

A recent article in the San Francisco Chronicle offered a roundup of 2021 housing market predictions by several Bay Area realtors. Highlights include:

  • All see a robust market in 2021 as the pandemic winds down, the economy rebounds, and interest rates remain super low.
  • Demand for spacious single-family homes will remain very high as many employees continue to work remotely.
  • The condo market will rebound as some workers return to the city
  • Overall optimism will increase as the future looks brighter.

Housing market 2021: Another forecast

Another housing market forecast for 2020:

With low inventory and (relatively) strong demand, home prices will continue to increase. September 2020 saw an 11 percent increase over the previous year while inventory decreased 39 percent year-over-year. The suburbs and smaller towns will continue to draw interest as working remotely continues and, with it, the need for additional space.

There is some optimism in housing starts but this will undoubtedly depend on the economy and, of course, the pandemic.

2021: An early forecast

Green Escrow | Real Estate News

Yes, there are still two months left in 2020 but real estate professionals are already looking ahead to 2021. After a steep decline in March and April, Bay Area real estate has rebounded with median home prices as high as they’ve ever been.

Analysts expect the trend to continue into early 2021. Currently, the inventory of available properties is at 1.9 months which definitely indicates a seller’s market. This could prices up even more.

While prices remain high – and are projected to climb even higher – historically low mortgage rates are a major inducement for buyers.

2021 Forecast: Sales & prices to rise

Real Estate Growth

The California Association of Realtors is forecasting that 2021 will see an increase in sales of single family homes by 3.3 percent and a rise in price of 1.3 percent for a median California house to $648,800.

Economic uncertainty and a continuing shortage of available homes for sale will keep these increases modest, according to CAR.

It’s also predicted that mortgage rates will remain historically low, which will encourage motivated buyers to purchase.