2021 real estate indicators

It’s December, and we’re already being inundated by Top Ten lists and retrospectives of 2020. But Ellie and I are already looking forward to 2021’s real estate market. Though we don’t have a road map to the future, we do have the skills to analyze various real estate indicators. Indicators are a great source of knowledge and insight to the future, and right now we are confronted with several touch-points that are important to note as we anticipate what might happen in 2021.

Financial Indicators

• Ultra-low interest rates. They’re historically low right now, and we anticipate them staying low for months. Seldom—if ever—has there been a weak real estate market when interest rates are low.

• Stimulus Money. Governments are helping their citizens during the Covid crisis. Trillions of dollars are already circulating globally, and it looks like more is coming to further fuel the economy.

• “Bonus Season.” Yes, many people will be getting bonuses this year, especially in the financial and technology markets where some companies have boomed. This capital will fuel real estate markets.

• Record equity markets. Not only do they make people richer, they make them feel richer; and that puts people in a good mood. Moods often drive markets as much as money.

Supply Indicators

• Under-building. The United States is behind its average rate of constructing new homes, by millions.

• Low inventory. Fewer homes are available, especially of more affordable entry-level homes, and more buyers than sellers right now can fuel a strong market.

• High demand: Millennials are coming of age and are buying homes now.

Consumer Confidence Indicators

• COVID Vaccines. They are here and distribution is about to start. Millions will be vaccinated every month. There is now a clear path to significant relief and an end to the pandemic.

• Political stability. The election insanity of 2020 is coming to a close. By the time the run-offs are complete in January, we will have a better understanding of future direction in the Federal Government. Certainty has value.

• The optimism of spring. Spring markets are often strong markets around the country. They fuel optimism, hope, and renewal.

Overall, we’re looking forward to a strong real estate market in 2021. Thinking of buying or selling? Contact us; we’re here to help.