Get A Quote
3 Real Estate Trends That May Impact 2021
2020…it can actually be used as an adjective now! A lot has changed this year, and even in the midst of economic disruption, the 2020 real estate market didn’t get hit as badly as anticipated—partly due to the record-low interest rates.
In fact, Freddie Mac’s interest rates recorded a 50-year low in the fourth quarter, and the housing market has been dubbed a “bright spot” by its chief economist, Sam Khater. Although 2020 has widely been considered a “boom” market despite pandemic adversity, potential home buyers and investors need reliable intelligence to plan for the next one-to-three years. Fortunately, existing data and information can provide insight into trends that may impact the 2021 real estate market. Here are three real estate trends that may impact 2021:
1. Urban Flight Favors Small Cities and Suburbs
Another real estate trend that may impact 2021 is “urban flight.” A cultural shift has been brimming for at least a decade that allows professionals increased work-from-home flexibility. Remote work surged by 91 percent over the last 10 years and 44 percent in the previous five. The impact of COVID prompted many organizations to go fully remote. A Gartner study conducted in the Spring indicated more than 80 percent of company leaders plan to maintain some type of remote workforce going forward. Real estate industry leaders concur.
“Remote work has opened up a whole new world of possibilities when it comes to buying a home,” Redfin chief economist Daryl Fairweather reportedly said. “Many residents of expensive areas like New York or Los Angeles couldn’t manage to afford rent and save for a home at the same time.”
In terms of the housing market, professionals have less of a need to remain in congested and high-crime urban landscapes. Experts are calling the relocation to small cities and suburban areas “urban flight.” The lifestyle change is expected to further increase housing demand outside big cities, and Zillow CEO Rich Barton went on the record stating that “people want to move.” Barton is calling urban flight “The Great Reshuffling,” and demand appears to far exceed housing inventory heading into 2021.
2. Quality of Life Amenities Drive Home-Buying Decisions
A real estate agent working the East Coast reported a New York City resident buying a seaside cottage “site unseen” during the spring of 2020. Last month we discussed this growing trend. Two driving factors prompted the homebuyer to pony up nearly $400,000. They are the desire to leave the troubled urban landscape behind, and outdoor amenities. While this may seem like an extreme example, people participating in The Great Reshuffling are determined to enjoy a better quality of life, and that begins with the outdoors. Quality of life amenities is a big trend that may impact the real estate market in 2021. Markets with beaches, hiking, fishing, and picturesque landscapes are checking priority boxes for work-from-anywhere professionals who are expected to be on the move in the near future.
3. Real Estate List Prices Expected to Rise
According to the National Association of Realtors (NAR), sales in September surged by 9.4 percent over August, a high-water mark not experienced since 2006. By contrast to 2019, sales soared by 20.9 percent. “Home prices are simply rising too fast due to insufficient supply and very strong demand,” NAR chief economist Lawrence Yun reportedly said of the trend.
The median home price rose by 14.8 percent and that figure marked the most pronounced increase in 15 years. As Americans return to work and the reshuffling continues, the 2021 trend could be a seller’s market that can get top-dollar in small cities, suburbs, and regions with heightened quality of life amenities.
Velocity Title Has You Covered for 2021
If you plan to purchase a new home or commercial property, consider working with the best title company in Maryland. Velocity Title utilizes next-generation technology to deliver the best title services possible. For a seamless experience, contact Velocity Title for a consultation today.