Yearly Review January 7, 2021

2020 in Review and 2021 Predictions and New Trends

The New Year is approaching quickly, thank goodness! 2020 was a wild ride, but the real estate stayed strong! We are in a seller’s market due to low inventory and higher demand. Below is an overview of 2020 key influences, what you can expect in 2021, and new trends in the housing market. I’m happy to answer any questions you may have.

2020 year in review – Quick recap of what happened from a Real Estate perspective

●  The covid pandemic caused an economic downturn, with more people working from home

●  Elections – divided government which the stock market likes

○  40% o the left side of center, 40% on the right side

○  Government has to work together brings stability and find a compromise

●  Real Estate in 2020 – Q3/Q4 sales volume up 20% higher than the same time last year

○  End of year home sales are up 3 to 5% higher than in 2019

○  Nationally home sale prices are up 8-9%, in Santa Cruz County, up between 9 and 10%

●  Interest rates – all-time low with solid underwriting for loans which was not the case in 2007/2008

●  The unemployment rate end of 2020 is 6.9% and moving lower

2021 Predictions

● Homes sales will rise by 5% to 10% due to employment, interest rates, and demand ○ Homes sold over $1M will be two times higher than a year ago

●  Jerome Powell, Federal Reserve Chairman, said Fed Funds rate to stay between 0-.25 to 2023

●  Favorable mortgage interest rates below 3%

●  Vaccine rollout combined with increase job growth

●  The unemployment rate at the end of 2021 prediction is 5.5% or lower

○ 6% is defined as full employment where anyone who wants a job can find one Trends – Post-COVID

●  New combo work schedule, two days in office, two days remote

●  People want more space, bigger homes, multigenerational living

●  Housing, privacy, and security are very important, versus rentals

●  Floor plans changing

○  Going away from the open space concept

○  need more rooms for individual offices and homeschooling

●  Remodels and renovations will be huge

○ Shortage of skilled workers and high prices for materials

●  Society is decentralizing, leaving the more expensive, densely populated areas for more affordable regions

●  Bay Area Silicon Valley workers moving over here and to the Central Valley for bigger homes and lower costs

●  Upsizing – millennials are skipping the starter homes and going directly to the bigger trade-up home

If you are looking to make a move in 2021, or know someone who is, please let’s talk….

 

Relationships are more important than transaction
○ I work to provide my clients with outstanding service during and after a transaction

Your referrals are the foundation of my business ○ I aim to exceed your expectations

Service that continues after the sale
○ I am here if you need a referral for a contractor, reducing energy costs, or any resources related to your

home.
WALT HEIL​ | smartgreenrealtor.com | DRE02028541 | w​alterheil@davidlyng.com​| 831.915.8457