As we look towards the coming year, there are many questions regarding what the real estate market will look like in 2021. Overall 2020 was not a great year (let’s not go down memory lane!); however, there were benefits for those who were looking to make a move in real estate. This past year was by far a seller’s market and those who wanted to sell were able to get top dollar for their homes. Another positive aspect to come out of 2020 was the low mortgage rates, which have been the lowest we’ve seen in years allowing buyers to buy more home for their money!
2021 will be another year of increasing housing prices, but we hope to see more inventory as sellers are recognizing they can capture a prime selling scenario. Already two weeks into January 2021 and the market is moving at a rapid pace with multiple offers on newly listed homes. Despite the pandemic and questionable economic factors, there was a large demand in 2020 to purchase homes. Unfortunately, we experienced a drastic decrease in inventory partly due to the pandemic, but mainly due to the fact that there weren’t many homes for the move-up buyers which created a road block to the real estate cycle. Because there are limited number of homes to buy in the Annapolis, Arnold and Severna Park areas, 2021 is an ideal year to sell your home! In Anne Arundel County in December 2020, the average sold price of a home was 11% higher than December 2019, but will more than likely increase again in 2021.
A recent Forbes article received expert opinions from Danielle Hale, the Chief Economist for Realtor.com who writes, “While we expect mortgage rates to tick up gradually, sales and price growth will be propelled by still strong demand, a recovering economy, and still low mortgage rates. High buyer demand and still-lagging supply will keep prices growing, but at a slower pace than 2020…” Although there is speculation that there may be a small increase in mortgage rates from the lowest they were in 2020, the Federal Reserve plans on keeping rates very low. Jeff Tucker, an Economist from Zillow writes, “The clearest barometer we have that reflects all these dimensions of the housing market is active inventory, which is down more than one third year-over-year. That suggests continued fast price appreciation ahead and fierce competition between buyers.”
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Feel free to reach out to any one of us with any questions regarding the market whether it’s selling, buying or both, we will help you navigate this environment to reach your real estate goals!