What will the key housing trends be this year?

Probably the biggest challenge that the housing market faces as we move further into 2021, besides maybe the impact of new strains of COVID-19, is that sale inventory remains so low. This past fall, the housing market saw more than half a million fewer homes available for sale than the prior year. According to realtor.com, the expectation is that inventory decline will slow down and maybe even come to a stop, and we might even see inventories finally register a slight increase for the first-time since 2019. 

Many expect a return to the typical seasonality with a very busy spring and summer where home prices will hit new highs (FYI, we've seen 25 consecutive weeks of double-digit price growth) as inventory tries to catch up in a continued seller's market. Mortgage rates will also stay low, under 3.5%. However, realtor.com shares that "the housing market in 2021 will be much more hospitable for buyers as an increased number of existing sellers and ramp up in new construction restore some bargaining power for buyers, especially in the second half of the year." The low mortgage rates will continue to blunt the effects of higher home prices for buyers.

Ongoing impact of remote work
Realtor.com expects home listings will continue to highlight features that support remote work such as home offices, "Zoom rooms," high-speed internet connections, quiet yards that facilitate outdoor office work, and proximity to coffee shops and other businesses that offer back-up internet and a break from being at home to become more prevalent. Homes with these features will sell more quickly and go for higher prices.

Despite realtor.com suggesting that there is likely to be a continued trend of people moving out of cities to suburbs to get bigger homes to work out of, we say TBD on the whole suburban migration. In our opinion, more time is needed to really understand what companies determine their "new work model" looks like. In this article, Bloomberg explains why they don't believe in the "big city obituary!"

For additional thought on real estate and global mobility, try one of these:

• Buying a home remains a sound decision, experts say
• What “15-minute cities” can teach us in mobility
• Home prices made a big jump in 2020
• Cheaper homes in less crowded areas on the wish list for many Americans