2021 Real Estate Market Forecast

Q: What do you expect for real estate in 2021, Gerald? Candy, Weehawken, NJ

A: 2021 Real Estate Market Forecast

5 Key Areas To Consider:

1. Housing Inventory
2. Pandemic surges & vaccine rollout and implementation
3. New Buyers Entering Marketplace
4. Remote Work
5. Migration

There was a shortfall of 4 million newly constructed homes in 2020 nationwide so housing sales are likely to remain strong even if income and the greater economy don’t bounce back because housing inventory relative to demand continues to plummet. The only fix for this problem in the short run is additional housing supply. As with much of what has transpired for the last 9 months, local real estate markets will be affected in large measure by the pandemic surge and vaccine rollout and distribution. Hopefully, by Q4 2021 the US will be closer to herd immunity and we’ll begin to get a better sense how local real estate market demand will stabilize over the near future. Millennials are the biggest generation in history and along with Gen Z buyers will make up the lionshare of first time home buyers. These new buyers entering local real estate markets will play a huge role in shaping how local real estate markets evolve (housing amenities for example will be key to these buyers). Increased telecommuting and remote work will continue to be an ongoing trend that outlasts the pandemic and will recalibrate demand in various local real estate markets (Places like Truckee, CA and Boise, ID have been beneficiaries of this trend so far). Suburban migration will slow and cities will attract more people although perhaps not the same people who fled cities during the pandemic because the basic appeal of cities has not changed due to the pandemic particularly among households without children. Thanks for your question, Candy.