As we round out 2020, many real estate investors are curious about the 2021 real estate forecast. While the real estate market stayed strong in 2020, the year presented unprecedented events around the globe that not only affected the real estate industry, but almost every other part of the economy and daily life.
What Does 2021 Have in Store for Real Estate Investors?
According to many reliable sources, including the NAR or National Association of Realtors, 2021 brings good news. Primarily, the main message from these sources is the real estate market is not going to crash.
As a woman real estate investor, it is important to follow market trends so you can position your business for ongoing success. If you have real estate investments, you do not need to fear a huge loss in market values based on the current market predictions for the new year.
What Factors Indicate a Positive Real Estate Forecast 2021?
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According to the NAR, “2021 could be real estate’s best winter ever.”
- Low Mortgage Rates – Predictions show mortgage rates will stay low in 2021, with rates slowly increasing toward the end of the year to around 3.4% by the end of 2021.
- Increased Home Prices – In 2021, home prices will likely increase on average 5.7% nationwide. Also, existing home sales will increase almost 10%.
- Continued Limited Inventory – Demand for homes will stay high. The high demand will prompt new construction and increased home sales. Predictions show new home sales are likely to increase almost 25%.
- Cheaper to Buy Than Rent – The incredibly low mortgage rates now put homeownership within reach for individuals that have previously rented. Monthly rental rates are often more expensive than the cost to own a home. This is also driving the low inventory and high demand.
- New Buyers Entering the Housing Market – As more American Millennials gain financial security, marry or start a family, they are entering the housing market. Because it is cheaper to buy than rent, they are becoming homebuyers in larger numbers.
- Virtual Real Estate Investing Opportunities – As more people work from home and online real estate technology grows, the concept of a virtual real estate business gained traction. Online tools, apps and other resources for virtual investing grew and improved in 2020. It’s expected new and improved technology will continue to expand in future years.
Will the Bubble Burst?
Predictions indicate we do not need to fear a bubble burst in 2021. This is not 2007 when the “perfect storm” caused the real estate and mortgage industries to crash. For that to occur, economists say home prices would have to drop 30-50% together with at least 10 million mortgage loans entering forbearance.
That is not the case today. Home prices continue to rise due to high demand. Plus, the loans currently in forbearance are less than 3 million and shrinking. The housing market is in good shape.
A Bright 2021 for Real Estate
At the end of the first quarter in 2020 as the world came to a halt, we all had questions and concerns about the real estate industry. As time passed, we saw strength in real estate.
While life isn’t going to be the same after our experiences this year, we have a collective new way to look at life, business and work. Technology improved this year to offer clever ways to facilitate and conduct virtual investing. These trends are here to stay beyond 2021.
Especially for women in real estate investing, the challenges of 2020 showed the benefits of virtual real estate investing. If you want to learn more about how to build recurring income and wealth through real estate investing, download our eBook, “7 Simple Steps to Creating a Virtual Real Estate Investing Business.”
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