From Real Estate experts to Bubble Pundits, what are they saying about 2021 San Diego Housing Market Forecast?(Note: This information was taken on 11/11/2020. Some organizations will update their information frequently).
What will the housing market look like in 2021?
CALIFORNIA ASSOCIATION OF REALTORS®(California Housing Market)
The baseline scenario of C.A.R.’s “2021 California Housing Market Forecast” sees a modest increase in existing single-family home sales of 3.3 percent next year to reach 392,510 units, up from the projected 2020 sales figure of 380,060. The 2020 figure is 4.5 percent lower compared with the pace of 397,960 homes sold in 2019.
The California median home price is forecast to edge up 1.3 percent to $648,760 in 2021, following a projected 8.1 percent increase to $640,330 in 2020 from $592,450 in 2019.
The baseline scenario assumes a COVID-19 vaccine will be available in the first half of 2021, and just a modest rise in cases in the coming winter.
A worst-case scenario would occur if there’s also a rise in foreclosures, zero economic growth, and Congress remains deadlocked over federal economic stimulus plans. If those things were to occur, the forecast would shift to a 9.8% drop in house sales and a 16.4% drop in the median house price.
The average for 30-year, fixed mortgage interest rates will dip to 3.1 percent in 2021, down negligibly from 3.2 percent in 2020 and down from 3.9 percent in 2019, remaining low by historical standards.
Southern California likely will see a similar pattern to the statewide trend, according to C.A.R.
Freddie Mac (National)
Total housing inventory declined 18.6% in August from the same month a year ago. We forecast house prices to increase by 2.4% quarter over quarter in Q3 2020 and 5.5% over the calendar year. Next year look for house price growth to moderate to 2.6%.
Redfin CEO Glenn Kelman told CNBC the pandemic-driven boom in the housing market is likely to last into next year. “There are so many people now who have decided they’re not going to be able to buy a home by year-end, who expect to do so going into 2021,” he said. However, he said, “There’s no way it can last forever.”
Keller Williams (National)
There’s a major potential pitfall lurking in the market, which is the potential for a high number of forbearances, according to Gary Keller – the founder of Keller Williams. If we get to the second quarter of 2021 and the number of loans in forbearance remains high, we could see homes begin moving onto the market and foreclosures increase. ““We’re gonna have a year or two of tough, and then we’re going to slowly start to climb out,” Keller said. “That’s what I believe.”
Zillow (San Diego)
The typical home value of homes in San Diego County is $632,264. This value is seasonally adjusted and only includes the middle price tier of homes. San Diego County home values have gone up 7.6% over the past year and Zillow predicts they will rise 7.5% in the next year.
CoreLogic predicts a decline in home prices in nearly every state by next year due to unemployment
By the end of summer, buying will slacken and we expect home prices will show declines in metro areas that have been especially hard hit by the recession. The U.S. housing market surprised economists by rallying in the midst of a pandemic. But the coronavirus may drag down home values after all. Prices will fall about 6.6% in the year through May 2021, the first annual decline since 2012, as the economic damage from the pandemic deepens, according to a forecast by CoreLogic Inc. Prices nationwide had climbed 4.8% in 12 months through this past May.
There’s at least a 75% chance of price declines in 125 metro areas by next May, led by getaway destinations in states such as Arizona and Florida that “faced the perfect storm of elevated Covid-19 cases and the subsequent collapse of the spring and summer tourism market,” according to the report. The last annual decline was in January 2012, at -0.3%.
The news is worse for the country’s casino capital. Prices in Las Vegas will plunge 20.1% as a plunge in tourism combines with values that were inflated before the pandemic, according to CoreLogic.
Meanwhile, in San Diego—where the market conditions are considered normal—home prices are forecasted to decline just 1.3% over the next 12 months. The firm projected declines of 11.7% in Boston, 9% in Denver, 7.4% in Houston, 6.3% in Los Angeles and 5.9% in New York.
Note: Housing Prediction is a interesting and popular topic in San Diego real estate. But don’t let it dictate your home buying/selling decision. Always concentrate on your goal, your big why. In the end, there are only two ways to make money in real estate. You either hit the right timing of the market or you have enough time in the market. That is, you either happen upon the right moment to buy your home or you hold it long enough for time to make your purchase right. Nobody is able to time the market. But you most certainly can count on the later.
- Tips For Home Buyers: Even as home prices continue to rise, affordability is working in favor of today’s homebuyers. According to many experts, rates this low are off-setting rising home prices, which increases buyer purchasing power – an opportunity not to be missed, especially if your family’s needs have changed. If you now need space for a home office, gym, pool, and more, it may be time to reconsider your current house. Buyers, do not wait on the sidelines. Instead, cash in on these incredible rates now.
- Tips For Home Sellers: Will the seller’s market continue? Probably. The market won’t tank anytime soon, yet we may be nearing price peaks. Anyone thinking of putting their home on the market should not wait. A seller will always negotiate the best deal when demand is high and supply is limited. That’s exactly the situation in the real estate market today. In 2021, when the pandemic is hopefully behind us, there will be many more properties coming to the market. Don’t wait for that increase in competition in your neighborhood.