Real Estate Predictions for the NC Triangle 2021

2020 was a year like no other, and it shifted Real Estate in a way few predicted! 

In March of 2020 fueled heavily by the unknown an emerging buyers market was forecasted. Lenders predicted elevated interest rates beginning in Spring of 2020, set to carry into the foreseeable future. We saw an ever so slight dip in sales at the onset of the pandemic in late winter and early Spring of 2020, however as home inventory decreased and interest rates remained historically low, demand soon soared. This leads us to 2021, a competitive market where low interest rates, low inventory, and high demand remain. 

A few factors that have increased housing demand. For those with school age children many were home, space got tight and this has led many families to consider the purchase of larger homes. Working remotely (telecommuting) has been a huge factor. Remote Employees have had the choice to move to desirable more affordable areas of the country. The NC Triangle checks those boxes. 

Demand remains high as some buyers delayed their home purchase in 2020 due to future uncertainty. Families search for larger homes as they fear a potential return to children learning from home. Apartment and Condo residents strive for single “family” homes as exposure to potential viruses is less, and technology has increased buyers’ ability to tour homes and purchase virtually creating ease and assisting in fueling the market. 

High Earners dominated the 2020 market as they saw less impact from the economic distress of the pandemic. According to the National Association of Realtors the median household income of First Time Home buyers in 2020 was $80,000 up from the 2019 average of $68,703. Young Adults led the 2020 home buying surge with Millenials making up 38 percent of the home buying market. 

Attom Data Solutions found that nationally home values rose at an average of 10%. Proof, buying a home remains a solid financial investment in most markets and most certainly in the NC Triangle Market. 

The National Association of Realtors Chief Economist predicts that the bulk of home inventory will remain in the hands of New Home Construction with a 21% increase in total sales from 2020. Existing-home sales in 2020 rose only 3% from 2019. The good news is NAR predicts a 9% increase in existing-home sales will occur in 2021. 

Rising home prices have increased Wealth Accumulation for current homeowners in the form of equity. This has affected young adult first time home buyers, more so than repeat buyers, young adult first time home buyers have no home to sell, they cannot “Cash out” on a sale of a home, thus their savings are often short in a competitive market for a first time home buyer. The good news is on a federal and state level this problem has been identified and in correlation with the Federal Reserve and government backed mortgages, Fannie and Freddie Mac aim to assist buyers especially first time home buyers in the form of a home buyer tax credit to assist with down payment costs.

Realtor.com predicts a Seller’s Market with high Home prices and buyer competition remaining through 2021. Buyers should see some much needed relief as available home inventory will slowly, but steadily increase in 2021. Realtor.com Economists predict swings should not be as wild as in 2020 and Real Estate should trend towards a more normal market becoming visible by Fall of 2020. Realtor.com predicts a 5.7% rise in home prices. Predicting a 7% increase in existing home sales and a 9% increase in New Home Construction sales. 

Zillow is excited for a year of dramatic real estate growth. Zillow believes suburban growth will remain steady, but as economies in cities begin to reopen a resurgence in urban growth will take hold. Pros of the pandemic are those who weathered the storm and came out still employed now feel they have a greater degree of financial certainty. As home values rise at record rates, many will view home ownership as a preferred method to renting. Zillow equates technology and the increased use of it in the home buying process to push annual home sales to an overall 21.9% growth, the largest annual growth since 1983. Competition will remain fierce as the inventory crunch will remain with a slow, but steady amount of homes entering the market. 

Redfin comes in optimistic believing that by Summer 2021 we should see a record number of Home Buyers as Mortgage rates remain in the sub 3 percent tier. Daryl Fairwether chief economist believes as people return to life which resembles that of 2019, more sellers will enter the market. Making for 2021 to have an impressive late second quarter, full 3rd and 4th quarter. Redfin predicts 2021 will close out the year as the strongest year of Real Estate sales since 2006. Redfin predicts existing home sales and new home construction sales to rise collectively more than 10% from 2020. This is great news for buyers and sellers. Fairweather predicts more new homes will be built in 2021 than in any year since 2006, thanks in a large part to suburban growth. By the end of 2021 home ownership nationwide will rise above 69% for the first time since 2005. 

National Association of Home Builders If any market had a bright spot and came out with a sunny disposition in 2020 it was Residential Home Builders! Inventory was slowed due to rising material costs and shipping delays. This has resulted in a price hike and a waitlist for many potential buyers. Inventory is improving in 2021 as NAHB reports more homes are slated to begin construction in 2021 then since the Great Recession. In January of 2021 new home inventory remained at 4.1 months supply nationally. 5 to 6 months of supply is considered balanced, thus a push to increase inventory via more building is critical for a balanced market. 

New home construction performed  particularly well in the NC Triangle as folks left the urban core of large cities, gowing the suburbs of mid-sized cities as telecommuting became the new way working for millions. A return to urban centers by buyers as the vaccine rolls out is anticipated. However, telecommuting will remain for mnay Americans and with the affordability of the suburbs, suburban growth will continue through 2021. 

Mortgage Bankers Association 2020 was a robust year for refinancing and home loans. 3.6 trillion was recorded in loan originations, the most since 2003. With interest rates predicted to slightly increase MBA has 2021 slated to see less loan originations at 2.8 trillion.The upside of less loan origination is a decrease in a seller’s market saturated with buyers. MBA predicts an inventory increase in 2021 and an average national price increase of 5.1%. 

Overall, home ownership remains an astonishing opportunity in the NC Triangle. Whether Home Ownership supports the way an individual wishes to live or is viewed as an amazing investment opportunity, Real Estate is a place where one can produce equity and first and foremost some memories along the way! 









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