Notwithstanding the many challenges the country faced in 2020, the housing market continued as one of the economy’s strongest elements. Now that 2020 has gone, what do the experts expect for the 2021 housing market? Because of the continuing record-low mortgage rates and major shifts in rising markets due to increased levels of remote work, it’s natural for Chesapeake rental property investors to wonder what type of housing market they may encounter in the months and years to come. While no one can tell for sure, a few indicators can help us forecast what we might expect from the 2021 housing market.
Rising Home Prices
Most housing industry experts have projected that home prices will start to rise through 2021. Strong demand and low inventory levels continue to drive prices up in many markets around the country, and while some commonly strong markets lagged in 2020, experts predict that these markets will rebound in 2021. Nonetheless, investors may want to look out for new emerging markets as workforces are not any more tethered to a specific location by on-site jobs that are are migrating away from urban centers.
Builders Struggle to Keep Up
With more buyers than homes for sale, and due in part to pandemic shutdowns in 2020, builders in numerous markets have struggled to balance the demand for new homes. Some experts expect that trend to continue through 2021, in spite of hopes that things will return to normal by the later part of the year.
High Rate of Relocations
One of the big surprises of 2020 was how remote work prompted so many people to seize the opportunity to buy new homes far from their jobs. Recent home sales have been going away from cities and toward smaller towns and suburban areas for months, which is anticipated to keep increasing. Investors may find new opportunities in previously slow or declining markets through the sudden influx of people looking for more room or wide-open spaces.
A New Generation of Homeowners
Millennials are starting to turn 30 this year, typically when homeownership levels begin to increase significantly. This sizeable generation has already contributed to the strong demand for affordable starter homes, further reducing available supply and driving up home prices nationwide. As they start competing for a new home, these would-be buyers will be able to turn to rent or find creative solutions to home shortages in their preferred areas. This may help investors find renters for properties at higher rates compare to the previous.
It’s (Still) a Seller’s Market
As home prices rise and listing lags behind demand, experts predict that 2021 will continue to be very much a seller’s market, at least just until the fall. The average time a home spent listed for sale has declined dramatically in a few markets, with some places seeing average listing times of days, not weeks. While some industry experts think things will ease slightly after the end of summer, most often, buyers looking for bargain properties are likely to have lots of competition all year.
After evaluating the 2021 housing market, are you looking to add new Chesapeake investment properties to your portfolio this year – or perhaps sell some before prices fall? Real Property Management Hampton Roads can help! We collaborate with rental property investors in Chesapeake and the surrounding areas to facilitate off-market deals you won’t find anywhere else. Regardless of what your investing goals are during the current year, we have the tools and expertise you need to maximize each of your rental homes’ earning potential. Contact us today for more information!
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