2021 will, we all hope, be the year we emerge from the coronavirus pandemic, vaccinated and ready to resume some of the regular activities that we’ve had to do without for so long.
In terms of the real estate market, this will hopefully mean things like return to more in-person showings and more inventory for interested home buyers to choose from.
However, most agents don’t expect the industry to return to “normal” fully by the end of 2021, as made evident in HomeLight’s Top Agent Insights for Q4 2020 report. In fact, many of the changes COVID-19 has spurred—live streamed walk-throughs, Zoom showings, etc.—are likely here to stay.
Here are 7 trends that industry professionals expect to shape real estate in 2021.
- Technology will continue to reshape the industry.
While many buyers miss being able to attend in-person showings for multiple homes, there’s no doubt that technology has made the entire home buying process more streamlined and convenient.
Many agents expect this trend to be here to stay. From eClosings, to live video tours, to locking in mortgage rates, real estate-related tech is going to play an even bigger role in home buying in 2021 than it did in 2020.
- Low inventory will continue to result in higher prices.
Despite a huge amount of home buying activity in 2020, inventory was at record lows, and many agents expect that inventory will remain low for at least part of 2021.
As the vaccine rolls out more widely, however, potential sellers will become more comfortable with listing their home, leading to a slow growth in inventory across the country. It’s important to note that this growth will likely vary by region, growing more quickly in areas that have greater accessibility to the vaccine.
- Affordability will remain a challenge for young and first-time buyers.
As a result of low inventory, prices have climbed steeply, presenting a real barrier to entry for younger and first-time homebuyers. Some agents expect prices to continue to climb, just more slowly than they did in 2020. Either way, affordability will remain an issue for many.
- An urban exodus will fuel suburban growth.
As so many of us have had to spend so much more time at home than ever before, the larger space, lower density, and greater affordability of the suburbs has taken on new appeal. Many urbanites are showing interest in moving to suburban regions in 2021, fueling growth in these markets.
- Low mortgage rates will partially offset higher home prices.
Mortgage rates dipped to an all-time low in December 2020, and are still quite low as of January 2021. This will help offset some of the affordability issues facing many home buyers.
- There will be a greater focus on racial and social inequity.
Like every American, real estate agents will have to grapple with the social and racial justice reckoning that rocked the U.S. in 2020. This will include developments like focusing more closely on fair housing policies, neighborhood development, and industry training for diverse and minority candidates.
- The end of certain forbearance programs could mean more foreclosures.
One negative possibility is that as certain pandemic-related forbearance programs come to an end, more homeowners could face foreclosure. Hopefully, according to Homelight’s report, those in danger of foreclosure will be able to take advantage of the strong seller’s market to sell before reaching that point.
The housing market in 2021 will look similar to that of this past year in many ways, but it will also begin to show us what real estate will look like in our post-pandemic future.