While our habit is to not make our own market predictions, we've summarized some views from various experts here.
Across the board - 5 to 6% annual increase in prices for single-family homes with some increased inventory.
Washington Post: “Young adults fueled the increase in home sales in 2020, with millennials making up the largest share of home buyers at 38 percent.”
American Enterprise Institute - Edward Pinto: “The supply of homes in 2021 will continue to be severely constrained. Existing supply is at a record-low level of 2.3 months, where six months is considered a market that is in balance.”
“This imbalance has been fueled by the work-from-home phenomenon, the millennial generation becoming home buyers, … second-home demand due to the pandemic and then of course low rates are leading to increased demand,” he said. “We see that this will continue for some time. It’s very difficult to replenish or add to supply.”
Zillow: Zillow expects demand to remain high and to surge in cities as economies reopen. It predicts annual home sales growth will be the highest in almost 40 years (volume of sales) as financial certainty brings more sellers into the market to meet the heavy buyer demand.
Zillow foresees a perfect storm of market conditions that will create the hottest spring shopping season in recent memory. Zillow predicts that although dense, urban living got a bad rap this year because of the pandemic, city living will almost certainly enjoy a renaissance in 2021.
Realtor.com: “The 2021 housing market will be much more normal than the wild swings we saw in 2020, said Danielle Hale, chief economist at Realtor.com. “Buyers may finally have a better selection of homes to choose from later in the year but will face a renewed challenge of affordability as prices stay high and mortgage rates rise later in the year.”
Quicken Loans: 5-6% increase in pricing with a slight increase in inventory. There will be a “shortage of housing with high demand”. Interest rates to hover around 3% with potential increases near year end.
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