The Seattle Metro looks to a 9.7 % increase in prices in 2021
Realtor.com looks to a strong seller’s market in 2021 in it’s Housing Market Predictions and Forecast. The median price is forecasted to rise 5.7% hitting a historic high. Mortgage rates for 2021 will go up later in the year to around 3.4%. Overall nationwide home sales should increase by 7% adding fuel to an already hot seller’s market. “I do see a more even-paced market which is good news for brokers and their buyers. We won’t see the same pandemic buying frenzy we saw in 2020 beginning in May,” explains realtor.com’s chief economist Danielle Hale.
Hold onto your excitement on getting that dream home minus bidding wars and above asking selling prices. “Inventory will remain low for the first quarter of 2021. Buyers who have taken a holiday break will be back looking after the first of the year,” Hale cautions.
Affordability continues to be a challenge in many areas of the country. What may help buyers is increased inventory later in the year. As vaccines are rolled out expect to see sellers who have held back listing their homes due to COVID put their homes on the market. “We expect to see those reluctant sellers come back later in the year,” Hale notes.
Let’s look at the forecast for a more detailed picture of what’s ahead. Some good news for first-time buyers is single-family housing starts are expected to rise 9% in 2021. Typically, a large portion of single-family housing starts are in affordable suburban markets and beyond.
Those rising mortgage rates will add some pressure for buyers to qualify for homes in markets experiencing double-digit price increases over the past year. Sellers will remain in control of the deals through much of 2021. Priced right move-in ready homes will still command a premium selling quickly. If you’re a seller planning on buying another home expect to move fast from accepting an offer to purchasing your next property in 2021.
As long as work from home remains or even a hybrid expect suburbs to continue to be in-demand. According to the forecast, “if companies commit long-term to remote work, demand for these homes could see an additional boost in 2021.”
Here’s a dive into the numbers for the top 100 Metros from realtor.com. Markets on the move which will continue to see strong 2021 price growth include the metros of Boise, Seattle, and San Jose-Sunnyvale-Santa Clara. Boise is looking at a 9.1% year-over-year price gain. In the Seattle-Tacoma, Bellevue metro where the typical value is a steep $783,969 realtor.com forecasts a 9.7 percent price increase.
If you are looking to buy in the already high-priced markets of San Jose-Sunnyvale-Santa Clara, you can expect to see a 10.8 percent year-over-year price growth. There, the take-your-breath-away typical value is $1,236,298.
Despite these bullish numbers, there are Metros where estimated 2021 price growth barely hits 2 percent like Dayton Ohio, Jackson, Mississippi, Little Rock, and urban Honolulu.
Buyer’s can consider waiting until later in the year for more inventory to go on the market. Though they most likely will pay a higher interest rate. Here’s some advice from Hale. “If you are a buyer in the first quarter you still need to be persistent. If you are struggling don’t lose hope because you will likely see more options later in the year.”