It’s no secret that 2020 has seen a booming real estate market despite the economic woes the coronavirus pandemic has caused. But can that keep going in 2021?
Lawrence Yun, chief economist at the National Association of Realtors, thinks so.
First, Yun is expecting the Federal Reserve will continue low interest rates as officials have said they want to do so for several years.
“So at least through 2021, one can anticipate a low interest rate,” he said.
Record-low rates played a major role in 2020’s booming real estate market, which saw months of consecutive growth and double-digit year-over-year price gains despite high unemployment and economic uncertainty amid the coronavirus pandemic.
Further, he said, COVID-19 vaccines will boost job creation and, in turn, benefit the housing sector.
The growth in people working from their homes during the pandemic may also continue to buoy home-buying, he noted, especially in communities traditionally seen as vacation destinations.
Yun isn’t sure all those workers will be returning to their offices.
“Many people are assuming they could work from home more frequently than before and hence want to have a larger-sized home,” Yun said. “Instead of going downtown every single day, why not live further out where things are more peaceful and they can get a larger-sized home at a more reasonable price?”
And even homeowners who stayed put through the pandemic may feel the itch for a change of scenery after seeing how their circumstances have shifted, according to Yun. That could turn into a lasting trend.
“These are homeowners who were perfectly content with their home before the pandemic, but now because they witnessed the pandemic, work-from-home flexibility, they’re itching for some larger-sized home or maybe different areas, quiet areas,” Yun said. “People who would not consider buying or selling a home several years ago are now beginning to be tempted to consider that, and that will filter in continuously through 2021.”