Will 2021 Deliver a Strong Real Estate Market?
Indicators are a great source of knowledge and insight into the future (almost as good a crystal ball). Right now, we have several key pieces of information that are important to note as we anticipate what might happen in 2021.
Ultra-low Interest Rates: They are historically low and are also fueling rising prices. Seldom - if ever - has there been a weak real estate market in a low-interest-rate environment.
Limited Inventory: Many areas around the US, including the Bay Area, are experiencing shortages of several types of properties, especially more affordable entry-level homes. More buyers than sellers usually fuel a strong market.
High Demand: The demand to buy a new home continues to escalate, fueled further by accelerated plans AND Millennials coming of age to buy.
Under-building: The US is under-constructing homes by MILLIONS.
COVID Vaccines: They are here and distribution is underway. There is now a clear path to significant relief and an end to the pandemic.
Stimulus Money: Trillions of dollars are already circulating globally and more is coming to further fuel the economy.
Elections: The election insanity of 2020 is coming to a close. By the time the run-offs are complete in January, we will have a better understanding of the future direction in the Federal Government. Certainty has value.
The Takeaway: To answer the question so many have asked: will home prices drop in the Bay Area in 2021? It's unlikely. In fact, the competitive, multiple-offer environment we experienced in the second half of 2020 will continue into 2021. It's still a good decision to buy a house in the Bay Area IF: