With the holiday season fast approaching and the year 2020 coming near to a close, I thought I would take some time to ponder and predict which elements of the real estate market will stay the same, and which might change in the new year:
- Home sales will remain robust.
There will still be a strong demand for downsizing and upsizing and first time home buyers. The major question, however, will surround the idea of what will be the housing “stock” in 2021? Will it be a majority of new construction or will the resale inventory come back to even higher inventory numbers? I personally believe it will be a combination of both.
- Refinance demand will remain high.
Since the interest rates have remained so low, this is akin to free money in the real estate market. However, many homeowners may decide to put that extra money into upgrades and sell their homes at a premium. Buyers typically will pay more for a “turn key” upgraded property- that is, a property that is both move-in ready AND a potential rental investment opportunity.
- Substantial increase in foreclosures will occur in 2021.
I believe investors should currently sell their current housing stock to end user buyers and get their piggy bank full to buy in 2021. Many investors have great housing stock with renters in it, with the ability to make 75k to 150k profit. Now is the time to consider that strategy.
- Remote work will continue to affect the housing market.
No longer is it important to live close to work. Buying a farm, living in the woods, or in a boat are all possibilities! Never before has it been so easy to work remote and live your dream while also waiting and pushing towards retirement. How exciting!
- Capital reallocation will occur for both multi-family and industrial commercial properties.
This group has weathered the storm of Covid and will now take precedence over office space funding.
In summary, live your dream, keep your piggy bank full for some great opportunities, and above all I believe there will be a mass adoption of technology to limit human interaction which might actually lead to some great investment opportunities.
Let me know your thoughts regarding 2021 predictions.
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Grace
