REAL ESTATE
Insider
The State of the Housing Market R E G I O N A L U P D AT E
A MESSAGE FROM OUR PRESIDENT AND CEO To our valued clients and future clients: Thank you for helping us make 2020 an outstanding year from a business perspective. We have all been dealing with so many things and your business means the world to us. Allowing our team to provide you great service is a privilege. We had the pleasure of hearing from Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research for the National Association of Realtors recently, and he shared his outlook for 2021. Hopefully this information gives you some insight into the question everyone is asking right now, “So, how’s the real estate market?”
Christy H. Budnick President and CEO
Berkshire Hathaway HomeServices Florida Network Realty
Over the last five years, prices have risen even though units have remained relatively flat: • 2015 5.3mm units sold • 2016 5.4mm units sold • 2017 5.5mm units sold • 2018 5.3mm units sold • 2019 5.3mm units sold And then there was 2020 with 5.64mm units sold!
So what’s in store for 2021? Dr. Yun predicts that there is potential for a 20 percent unit increase, landing somewhere between 6.1-6.8 mm units sold based on: ο The economy will improve, likely seeing an increase in GDP of 3-4 percent. ο Vaccinations will improve, with half of the Nation vaccinated by summer and reaching population immunity by the fall. ο With vaccinations and improvement in the economy, it is anticipated that Baby Boomers will enter the selling ring in large numbers, improving inventory. ο President Biden’s housing policy aimed at boosting middle-class homeownership. It is anticipated that a first-time homebuyer credit may be made available that would provide help with the down payment versus a tax credit on a tax return. ο Housing starts are up with a strong focus on single-family home production versus condo/townhome properties, improving inventory. • In his official forecasts Dr. Yun predicts 4 percent price growth. Being more candid with us, he shared that it will realistically be 5-7 percent. • It will take 2-3 years to return to balanced market conditions and that inventory will continue to be tight until then. • Mortgage forbearance: At the beginning of the pandemic, 5 million homeowners applied for mortgage forbearance. Of the 5 million, only half couldn’t make their payments while the other half continued making payments. When forbearance ends, there will be some homeowners who need to sell their homes. Foreclosures are unlikely since most homes have positive equity. It is expected that President Biden will extend forbearance to allow for more job creation and the economy to strengthen. • Strong sales of vacation and luxury homes are expected, particularly since people can largely work from home now. • Interestingly, the data is NOT showing flight out of cities to suburbs with the exception of New York City. Instead, the migration is a result of more people with the ability to work from anywhere and a flight from high-tax areas. Overall, Dr. Yun is very optimistic about 2021 and so are we! Your Berkshire Hathaway HomeServices agent will be happy to give you an analysis on our local market and your home’s value if that would be helpful. Thank you for reading our newsletter – We hope you find it valuable. ©2021 BHH Affiliates, LLC. An independently operated subsidiary of HomeServices of America, Inc., a Berkshire Hathaway affiliate, and a franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of Columbia Insurance Company, a Berkshire Hathaway affiliate. Equal Housing Opportunity. Information not verified or guaranteed. If your home is currently listed with a Broker, this is not intended as a solicitation