Housing Market Predictions 2020 & 2021
The real estate industry is on fire as the demand for residential property in the positive curve even in the pandemic. With the advent threat caused by the COVID 19, people have started using their home for the Gym, Office Space, and of course, to live.
A recent report is made by a Harris poll that shows that more than 40% of the Us citizen are looking to buy a house in the urban cities to enjoy their life at a less crowded pace.
New and existing home sales are hitting the upper mark, and it seems that this trend will only move forward with the interest rate remaining low. With how the current scenario stands, we can see the momentum only going forward.
How Will The Housing Boom Continue In 2021?
With the combination of ultra-low interest rates and high demand for real estate properties, the real estate market moves rapidly. Here are the reasons why the housing boom will continue in 2021.
1. People Are Searching For Less Crowded Residential Area
With the COVID 19 infection spreading from person to person, people are looking for a less crowded place to live in. The pandemic is driving people to flee the urban areas, away from apartment dwelling.
According to the New York Times, from March to August, the number of people who have left the crowded city life is more than 50% year over year.
HireAHelper is an online marketplace that has found that people are moving out of large cities like New York, Los Angeles, San Francisco and moving into small cities like Scottsdale, Arizona, and Durham, North California.
2. Price Acceleration Of Existing Homes
In the past couple of months, it has been seen that sales of the new house have gone up by 15%. Which is more than the sale of the old houses.
This statistic proves that people are looking for new houses to live in during the pandemic period. Accelerating sales has spilled over. The commerce department also highlighted the fact that the price of an average house was also seen on a hike of more than 11%.
3. Inventories Remain Very Low
The Homebuilders are salivation over the low priced inventories. In a report, it has been seen that there were around 1.5 million houses for sale in August. These numbers were decreased by 18.6% over the three months.
That means, if the rate of reduction of inventories keeps on going like this, then it will take the next three months to clear out the remaining houses in inventories.
If we look back in history, having a seven month home supply is considered a healthy equilibrium. However, we can see that equilibrium is being destroyed. It has also been seen that nearly 70% of the homes put on sale were sold in less than one month.
If you are also one of the people who are looking for a fair price deal, try contacting David Ebrahimzadeh. He has been part of this race and has helped many clients to get their dream homes.
4. COVID 19 Is Driving Up Divorce Rate
The spread of COVID 19 is not going anywhere. This has forced people to be stuck in Homestuck with each other. This is causing the divorce rate to go higher than the normal rate. This is proven by the report made by overviewing a small period between March 2020 to June 2020. It has been seen that divorce cases have increased by 34%.
Now that people are starting to live separately, this means they will need a house for that. This might not be the case if you are alone. But, if children are involved, finding a house becomes the priority.
Conclusion
The Bottom line is that the COVID 19 has brought a cascade of events for the real estate industry. People are moving out of the large cities, searching for houses situated in urban areas to safeguard themselves from being infected by COVID 19.
This is what we think and predict the real estate market. We will also like to hear your thoughts on whether the real estate market will keep flourishing or take a back seat in 2021.