Find yourself passionate about real estate? Then here are 10 Real Estate Trends for 2021 you can’t miss!
It is common knowledge that 2020 was a challenging year, impacting all possible spheres you could ever think of: beyond the shadow of a doubt, the real estate market is no exception.
Even though the pandemic did mess up the property sales in spring 2020 (which is considered one of the hottest seasons for real estate sales during the year), the market quickly recovered from the losses by the end of the year. Many real estate agencies contemplate how the market will keep its head above water, researching various studies and writing thematic articles. One of those companies is My Perfect Workplace, which is a website that helps brokers/agents, office vendors, and renters to market commercial real estate for lease or selling, making it easier for prospective tenants to locate their dream workplace or investment property. Luckily, here you can also find a blog section with all related articles covered.
No matter if you are a Calgary real estate agent or consider buying/selling a property this year: if you clicked on this article, you are most likely wondering whether the market will manage to shake out in the current economic climate. Enough small talk, as we have handpicked 10 real estate trends for 2021 to keep an eye on!
Prices and turnover rate are still rising
The market is highly competitive
People are flocking to suburbs
Real estate continues to go virtual
Housing prices are going up, while rental prices are going down
There is an increasing demand for more space
Increasing number of defaults and foreclosures is anticipated
Alternatives to security deposits are emerging
Millennials are the main home buyers
There are going to be more listings for luxury homes
Prices and turnover rate are still rising
Not to mention that COVID-19 caused a shortage of housing inventory in 2020, stimulating the prices to rise. Nonetheless, this can be good news for sellers! The median home sales price is expected to grow 5%–6%, and according to Norada Real Estate Investments, the home turnover rate is higher than ever, with homes spending 14 days less on the market than a year earlier.
The market is highly competitive
On the other side of the coin, the market has become highly competitive due to a shortage of listings. Let’s get it clear: imagine you consider purchasing a two-room flat in the city center. In a healthy market, you can boost your creativity and come up with a plethora of requirements and characteristics for your future home. Whilst in a competitive real estate setting, you will not be able to be as selective when it comes to setting those requirements.
People are flocking to suburbs
With the urgent necessity of working from home, space has become a desirable commodity – particularly, affordable space. Consequently, suburban areas – which were already experiencing an upward trend of potential buyers pre-COVID-19 – are more popular than ever.
Real estate continues to go virtual
With social distancing coming into play, countless real estate agencies utilize their resources to include virtual tours, life-stream open houses, and any other interactive content that can “substitute” real-life experiences. Eventually, more emphasis in 2021 will be put on videos and photos in real estate listings.
Housing prices are going up, while rental prices are going down
Hmm, what are predictions usually based on? By all means, they are based on data from the past years. In consequence, we couldn’t miss providing you with some thoughtful insights from the previous year!
In 2020, the housing and rental markets, especially in California, were impacted in unusual ways. In the housing market, prices began to increase, while demand and, as a result, prices in the rental market fell. While prices fell in April and May, prices in 2020 were up by an average of 3.4 percent nationwide throughout October. Prices in the top 50 metro areas rose just 1.4 percent from January to October 2020, relative to the same timeframe last year, and the median listing price was $404,443.4.
Starting from January till October 2020, on average, houses spent 65 days on the market nationwide, which is two days less than in October 2019. Moreover, houses in the top 50 metro areas spent 53 days on the market on average, compared to 56 days in 2019.
In a nutshell, buyer demand, and therefore the real estate market, is high thanks to record-low mortgage rates and low inventory.
There is an increasing demand for more space
The more time we spend at home, the more spacious we want it to be. Indeed, who can blame us for that? As a result of spending much at home (if not all of it), we are eager to have more space to work, dine, workout, rest, and simply feel that we are not locked in our houses like a bird in a cage.
Increasing number of defaults and foreclosures is anticipated
As a result of the pandemic, the number of borrowers unable to repay their loans is expected to rise in the course of 2021. Despite the fact that many employees and companies managed to take their operations to the digital platform and survived the lockdown, many failed to do that and appeared in an endlessly-feeling trap. Obviously, it is anticipated that many individuals or organizations cannot recover from the losses and cannot pay back their loans.
Alternatives to security deposits are emerging
There may be a change to deposit options such as surety bonds to support Americans who may have difficulty paying a high deposit upfront, which will also provide additional collateral security to tenants. For us not to speak in the air, here is a short definition of surety bonds: “A surety bond is a deal between three parties—the principal (you), the surety (us), and the obligee (the individual requiring the bond)—in which the surety financially promises to an obligee that the principal will obey the bond’s conditions.”
Millennials are the main home buyers
Millennials, believe it or not, are the most popular owners of residential real estate. Members of this generation have been able to secure steady employment, with average household incomes of $88,200. The majority of Millennials favor lower- to upper-middle-class housing, accounting for 38% of the industry.
So, how can vendors take advantage of this burgeoning market? One thing is certain: make full use of the advertising perks the Internet offers. Millennials are known for scrolling down the Internet before making any purchase online. Sellers can also have residences that are eco-conscious to keep up with the trends available.
There are going to be more listings for luxury homes
Last but not least, we are going to experience an increase in demand for luxury homes. Sounds contradicting (taking into consideration the recession, right?
Luxury homes saw a 60.7 percent YoY rise in the three months ending on November 30, 2020. During the same period, new listings rose by 31.5 percent. The median purchase price for these properties is $899,000, which marks a 9% rise from the previous year. Luxury homes spend an average of 55 days on the market. However, it fell -27 days YoY in this segment.
The price of high-end residential real estate could escalate again. However, after the pandemic is over, prices could fall to lower levels. The law of supply and demand governs the market, with high inventory levels driving luxury home prices. This may be excellent news for buyers looking to profit from expensive properties, which seem to be undervalued at the moment.
Oh, this COVID-19! It has affected so many aspects of our lives one can lose track of, including the real estate market. Nevertheless, we all hope to turn over a new leaf, and new trends keep on adding to our daily life routines. We hope you enjoyed reading our 10 real estate trends for 2021 and will keep on exploring more on this topic, as it almost never gets boring!
