For real estate agents, the housing market in 2020 finished strong with record-low mortgage rates, relocations made possible by remote work and a desire for more space to live and work.
Although the real estate market presented some challenges this year, it ended on a positive note. The National Association of Realtors in late December predicted 2020 would end with total home sales about 5.7 million, the highest level in 14 years.
With 2020 (finally) in the rearview mirror, here are a few predictions that we have for the real estate market this year.
IT’S TIME TO EMBRACE TECHNOLOGY
There is no question that 2020 was a game changer for the digital world in real estate. Real estate agents found themselves doing everything on their phones and computers.
Think: virtual buyer and seller consultations, showing properties on FaceTime and conducting remote closings with RON (remote online notarization). Even our networking was virtual this year as more people turn to social media to make connections.
In 2021, we should expect continued advances to the technology we use to do business on the real estate sales, legal and lender sides.
Mortgage Rates Will Remain Low
Economists from the Mortgage Bankers Association expect 30-year mortgage rates to average around 3.1% during the first two quarters of 2021.
With rates remaining low, there are still millions of homeowners in the U.S. who could reduce their monthly costs by refinancing their existing home loans.
And they should do it soon .
Although there is no indication of mortgage rates rising anytime soon, there is still a lot of uncertainty among real estate agents around what kind of impact the ongoing pandemic and COVID-19 vaccine will have on the economy.
HOME SALES WILL CONTINUE TO RISE FOR CHICAGO REAL ESTATE AGENTS
As we saw in 2020, homeowners will continue to take advantage of our “new normal” of remote work.
Some may seek homes with more rooms for home offices and virtual schooling. Others may leave behind the amenities of big cities or purchase second homes in suburban or rural areas.
According to Forbes, 2021 will see more home sales than any year since 2006, with annual sales growth expected to increase from 5% in 2020 to over 10% in 2021. Forbes also predicted that “rising prices for existing homes will increasingly drive more homeowners to consider a new one.”
Here in the Chicago real estate market, the suburbs that came up on top. In November, the suburbs saw a 31.9 percent increase in homes sold over November 2019. In the city, sales were up 17.6 percent.
Although by the end of December, there were only 1.8 months of available inventory in most markets, it is not uncommon to see a seasonal dip. We believe that inventory will return to a healthier level as the spring market begins.
What other predictions do you have for the year ahead? Tell us yours in the comments below!