Lindsay Guion lists 5 predictions for the housing market in 2021
If you thought that the housing market was dynamic in 2020, then that was just a sneak preview of what 2021 is likely to have in store. According to Lindsay Guion, the Founder of the DC Team at Long & Foster Real Estate, and CEO of GUION PARTNERS, here is what to expect in the year ahead:
1. Sales and prices will continue to grow
While the pandemic has been financially punishing to many individuals, families, and businesses — especially small firms — the housing market in 2021 should continue to grow with respect to both overall volumes and average prices.
“The key driver here is historically low interest rates, which are compelling many renters to enter the housing market for the first time, and convincing many homeowners to upgrade to a property that better suits their lifestyle and preferences, or is in a more desirable location,” commented Lindsay Guion. “And while there is some expectation that interest rates may start to rise in 2021 as the economy rebounds, this increase will not put the brakes on the uptick.”
2. Many remote workers will relocate vs. renovate
In many industries and sectors, the pandemic has made remote working the norm rather than the exception. What’s more, a survey by Gartner found that 82% of executives plan to allow employees to work remotely at least some of the time post-pandemic — which is good news because a USA Today survey found that 30% of remote employees would rather quit than return to the corporate office.
What does all of this mean for the housing market in 2021? It means that millions of remote workers across the country are going to face an inescapable and unpleasant reality: their home office might be tolerable for the occasional work session but is inadequate for anything long-term. And while some of these remote workers will renovate their home — for example, re-purposing a spare bedroom or garage — other remote workers will find it preferable to relocate.
“Many remote workers who need to re-invent their home office are not going to take the financial risk or deal with the hassle of getting permits, knocking down walls, and rewiring outlets and lights,” commented Lindsay Guion. “Relocating allows people to target properties on the market that already have functional and suitable home offices, or have space that can rather easily, quickly and affordably be re-purposed as a home office. At the same time, these homeowners can check other boxes on their wish list, such as a bigger yard, a larger garage, more bedrooms, and so on.”
3. The millennials will come (again)
The largest cohort of millennials are turning 30 this year, which is typically the age at which many first-time homebuyers enter the market. At the same time, many older millennials (37-40 age range) are starting to look for their second home, which will crate some inventory for their younger cohort counterparts.
4. The suburbs will undergo a reputation rehabilitation
The suburbs have always had an image problem. Even though some suburbs like Mesa, Long Beach, and Fort Worth are massive and have populations in the hundreds of thousands, they live in the shadow of neighboring big cities, but at the same time are not small enough to earn adjectives like “quaint” and “charming.”
The pandemic and the shift to remote working has liberated many people to expand their home hunting sights to the suburbs, where compared to a downtown core property prices are cheaper, and schools and parks are more plentiful.
“I don’t think that we are going to see a mass exodus from cities in 2021, because there are many people who still need to be a 10 or 15-minute train or bus ride to work, and also because there are many things to love about living in a downtown area that cannot be duplicated in the suburbs,” commented Lindsay Guion. “However, many folks who prior to 2020 couldn’t even dream of living in the suburbs are, in 2021, going to have that option thanks to remote working.”
5. Technology will re-invent the home buying experience
The pandemic slowed down — and in some parts of the country, shut down — the traditional home buying process. But has also dramatically accelerated the development and adoption of technologies like virtual open houses and secure eClosings. This this trend will definitely continue in 2021 and become a permanent part of the real estate landscape.
“One of the significant benefits of technologies like virtual open houses, is that they can be recorded and reviewed at a later date or shared,” commented Lindsay Guion. “For example, a couple can particulate in a live streamed open house in the morning, and then later in the afternoon share it with family members or friends to get their input. It adds a whole new element to the process, and one that is both very buyer-friendly and seller-friendly.”
The bottom line
Alas, there is no crystal ball that will declare with absolute certainty what the housing market will look like in 2021. And frankly, after a year as wild and crazy as 2020, it’s understandable that some prognosticators are a bit reluctant to draw any conclusions —simply because all we know about the “new normal” at this point, is that it’s going to be pretty abnormal for a while.
Yet with all of this being said, it is a very safe bet that all of the predictions and trends that Lindsay Guion highlights above will shape, define and drive the narrative in this year’s housing market. As always, time will tell.