Monday, December 21, 2020 / by Sonya Reiselt
What will the Real Estate Market look like in 2021?
In what has been one of the biggest surprises of 2020, the real estate market continues to thrive and experts everywhere are expecting this trend to continue well into 2021. While the market will remain hot, there are a couple of significant shifts that both buyers and sellers should familiarize themselves with when preparing to purchase or list a home in 2021.
What was a heavy trend in 2020 will continue to increase for many reasons in 2021 – people are continuing to move to the suburbs. Both families and singles are finding what they need outside of the city in an overwhelming way.
· For the past 2 years, millennials began a shift in the market by taking their families and moving to the suburbs. Due to COVID, this no longer seems like a trend but more of a lifestyle change that’s here to stay. While families have been forced to work from home, companies have realized the possibilities of making remote work more sustainable. Why is this significant? It has dramatically decreased the need for a short commute into the city, giving families more flexibility to find their ideal suburb and neighborhood.
· Not only are existing homes in the suburbs going to continue to be in high demand in 2021, but new construction opportunities will also be a popular want. New construction took a hit in 2020 due to material shortages and lack of labor, however, this is expected to bounce back at some point in 2021. Families opting to build a home of their own will, with any luck, contribute to solving the issue of low inventory that buyers faced this year.
Interest Rates and Home Sales
2020 was certainly a year in favor of the seller and 2021 will continue to bode well for those hoping to put their home on the market. Are you hoping to buy a home within the next year? Good news! While it’s still projected to be a seller’s market, there are a lot of positives for buyers as well.
· Interest rates reached record lows in 2020 and, while they are expected to rise throughout 2021, buyers can be optimistic that they’ll remain at quite a favorable rate.
· Home prices are expected to rise by about 5.7% by the end of 2021, with a slow increase in the first half of the year followed by a steadier increase in the second half. This will continue to keep the market competitive and will bode well for sellers.
There’s no doubt that COVID has affected what buyers are looking for and prioritize when searching for a new home. While these are considered trends, they are preferences that aren’t expected to change anytime soon.
· Updated kitchens. This might not be a trend that started because of the pandemic but it certainly increased due to it. Families are spending significantly more time at home which means they are using their kitchen more for cooking, gathering, learning, etc. Even those who used to spend a substantial amount of time eating out are now realizing how vital functioning and aesthetically pleasing kitchen really is.
· Home offices. It should come as no surprise by now how important home offices will be for buyers in 2021. With working from home becoming more and more permanent for many families, having a designated space for an office is going to be a necessity. Whether it be a space in the basement or an extra bedroom that can be utilized as such, it can be expected that home offices will play a major role in buyers making an offer on a home this coming year.
· Ample storage space. With all of the time, people have been spending at home, reorganizing, and learning how to properly store items around the house has essentially become the new American pastime. This will be an important staging aspect for sellers that haven’t had to take such precedence in the past. Buyers are going to show more interest in checking the closets, laundry area, pantry, and various other storage spaces to make sure they meet their needs. Having your home well organized will go a long way when buyers are trying to envision their items in the space.
· Room for leisure. It will be a while before things go back to normal and people feel comfortable taking their kids, and themselves, back to the public pools, theaters, rec centers, etc. Having space dedicated to leisure activities will be a significant asset in 2021. Whether this be a pool in the backyard, a home gym, a glorified playroom, or a theater room, families will relish at the fact that they can entertain themselves in the comfort and safety of their new home, at least until they’re comfortable to venture back out in public.
Whether you’re hoping to purchase or sell a home in 2021, good luck! And make sure you have the realtor who knows the Beaufort and Lowcountry areas best, Sonya Reiselt, at your side!
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