January 7, 2021 —
“The timing of your decision is just as important
as the decision you make.”
— John C. Maxell
The Art of Good Timing
As with many things, timing is everything when it comes to selling or buying a home. Local sellers, for example, profited from the incredible demand for homes last year with buyers who jumped on low mortgage rates and sought less crowded housing options in the suburbs. With limited housing inventory, many sellers enjoyed speedy sales accompanied with multiple offers finalized at or above asking price.
In my more than 20 years’ experience with real estate,
timing has been key to success for my sellers and buyers.
The foundation of my approach to real estate is built on a commitment to helping each of my clients achieve both their short- and long-term real estate and financial goals. To ensure their success, I spend many hours studying local, regional, and national real estate markets. I then share what I learn and confidently guide clients to intelligent decisions for today and tomorrow.
Will the 2021 Local Real Estate Market Mimic 2020’s Whirlwind?
“Despite the pandemic, resulting recession,
and record high unemployment, 6 million homes sold
and the average house price was up 5 percent [in 2020].”
— Ingo Winzer, Forbes
According to Ingo Winzer’s recent Forbes article, 2021 sellers should consider that:
- Lack of available homes will benefit sellers early in 2021
- ATTOM Data Solutions Chief Product Officer Todd Teta adds, “We’re exiting 2020 with a dynamics that will more than likely keep this [vigorous] housing market going. There is incredibly low inventory, with less than 500,000 homes for sale, mortgage rates at 50-year lows, and no sign yet of distressed sellers from the recession. These supply and demand factors will push prices even higher in the first half of the year.”
- The economy will need time create new positions for job losses
among people who have permanently lost positions in retail, the restaurant industry, tourism, manufacturing, and certain technologies
- Mr. Winzer writes, “The average US job loss in the past year was 6 percent, so a 2 or 3 percent loss right now looks pretty good. Because states have had different shut-down policies, the job numbers aren’t strictly comparable. Similarly, my estimate of how many jobs in each market are vulnerable is mainly relative (the average for 320 markets is 17 percent) and I don’t expect vulnerable jobs to necessarily become job losses.”
- Unemployed people will move from areas with high-priced housing to areas with job opportunities and reasonably priced housing
- According to Mr. Winzer, people and businesses still want and need to live near metropolitan centers with benefits of urban life, including varied social / cultural activities, access to outstanding healthcare, and sophisticated educational options for their children
- Even home buyers without children understand the influence good schools have on the value of their real estate investment
- Housing prices are likely to remain stable / favorable for certain markets in 2021, based on 2020 trends
- Since price booms are likely behind us, there will be limited opportunities to flip properties at a profit; however, renovating older properties for resale at higher values might still be a reasonable investment
- There will be strong demand for rentals in 2021 and beyond
- Unemployment rates will expand the lower-end rental market, with increased financial risk for investors who own low-end rental properties
- With fewer buyers who can afford a home, the rental market will continue growing in the long term. Winzer writes, “The surge of home buying in 2020 pushed home ownership to 67 percent, up from 65 percent in 2019; but that’s probably a one-time event as the recession has damaged people’s savings as well as their incomes.”
Many Real Estate Economists Support Positive 2021 Predictions
Other real estate economists predict vigorous real estate activity in 2021. Realtor.com Chief Economist Danielle Hale, for example, suggests that strong demand for homes coupled with low interest rates in 2021 will result in sales as high as 7 percent, with housing prices rising 5.7 percent.
Although Mr. Teta echoes Ms. Hale’s predictions, he writes, “[Housing] Inventory and pricing should ease a bit in the second half of the year, and larger economic headwinds could start showing up. Until then, buyers should be cautious and sellers jubilant.” Mr. Teta’s prediction is, I believe, key as sellers consider the timing for marketing their homes.
Variables That May Affect Timing for Selling Your Home
Better.com Chief Product Officer Elana Knoller expects homeowners to take advantage of low interest rates for refinancing. She cautions, however, that although the Fed suggests it won’t soon raise interest rates, uncertainty about the new administration, availability of the coronavirus vaccine, and hope for an improving economy may end the record-low interest rates of 2020.
Home sellers should consider
having an active first half of 2021,
with unknowns thereafter.
A Few Words on Housing Starts
National Association of Home Builders Senior Vice President Robert Dietz suggests housing starts for single-family construction are favorable. He adds, “Some slowing of new home sales growth will occur due to a growing share of sales from homes that have not started construction.” Mr. Dietz believes the market will continue to see lots of eager buyers given shifting demand “…for lower-density markets and historically low interest rates.”
Mr. Dietz adds, “…supply-side headwinds will persist…”
because higher construction costs,
longer delivery times for building materials,
an ongoing shortage of labor skills,
and regulatory cost burdens
will limit residential construction.”
So what’s the bottom line for sellers
considering downsizing, upsizing, or relocating?
There’s no time like the present to market your home!
Home sellers may count on vigorous sales
for early, mid, and late spring 2021,
with the potential
for slower real estate sales thereafter.
Local sellers who market their homes this spring can capitalize on:
- A large number of eager buyers who missed out on buying a home last year
- Exceedingly low interest rates that continue to encourage home buyers to act
- Limited housing inventory that continues to positively influence sale prices
The 2021 real estate market
is likely to continue being seller-friendly,
with buyers enjoying low mortgage rates a bit longer.
Buyers Favor the Suburban Setting With Urban Amenities
If you own a home in Chatham or a surrounding town, your home offers buyers everything they want, including easy access to New York City, excellent schools, outstanding health care, walkable town centers, and interesting activities of all kinds.
The Spring 2021 Real Estate Market Promises Success for Sellers
By all accounts, the spring market will be a good time to sell your home and make the most of your investment in 2021. If you’d like more information about when and how best to market your home, let’s chat. I believe in a no-pressure approach that gives you the information you need to make an informed, intelligent decision about your most valuable financial asset that establishes a sound foundation for your future.
If you have questions, I have answers!
Call or email me today at 201-532-0788