With the year coming to a close and COVID-19 taking a toll on the entire economy, you may be wondering how it has been affecting the housing market and what the new year has in store for the industry. Well, the housing market has remained strong, while picking up some different trends than previous years.
Whether you’re a real estate agent, looking to buy, or looking to sell, new trends can help you achieve your goals in the housing market by being a reliable source of change and helping you make better decisions.
Here are some of the biggest emerging trends and technology for the housing market you should know in 2021.
Home Prices are Rising
Let’s start with home prices! In the last few years, home prices have been rising and this trend will likely continue in 2021.
Here are some of the median home prices in past years (in today’s dollars):
- 1980: $148,000
- 2000: $180,000
- 2019: $309,000
- Today: about $320,00
Overall, this data shows a major increase in U.S. home prices throughout the last 40 years!
Although the current median home price is one of the highest in history, the growth rate is one of the slowest (about 3%). However, Lawrence Yun, the National Association of Realtors Chief Economist, is confident that the home price growth rate will reach 4% by the end of 2020.
This means that there will likely be a slight increase in home prices in 2021, instead of a drastic increase like there has been in previous years.
Low Housing Inventory
One of the reasons that house prices are increasing is due to the lack of housing inventory. Due to COVID-19, there has been more demand than supply when it comes to the housing market.
Inventory is predicted to stay low for the rest of 2020 and for a lot of 2021. This will cause the continued increase of home prices and bidding wars.
Mortgage Rates are Low
In 2020, mortgage rates hit record lows.
In January 2020, the average 30-year fixed mortgage rate was about 3.7%. When COVID-19 hit, the Federal Reserve responded by dropping the federal funds rate, which caused other rates across the country to drop as well.
In Oct 2020, the average 30-year mortgage rate in California hit 2.875%, one of the lowest rates in history.
In addition to mortgage rates being at an all time low, refinance rates all over the country have been at an all time low as well.
Economists believe that these rates will continue to stay low until the economy recovers, which is still unclear. Therefore, you should continue to see low mortgage rates well into 2021.
Millennial Home Buyers are the Majority
Millennials have been the largest group of home buyers in the past two years. They are predicted to be the largest group in 2021 as well.
(Source: National Association of REALTORS® Research Group)
What does this mean for the housing market? As millennials are beginning to look for their first home, location and tech savvy listings are important.
Many millenials are moving out of cities and into the suburbs. Suburbs tend to be a hotspot for millenials due to safe locations and affordable prices.
Millennials are also known to be tech savvy. This means that online real estate listings will become more important in the upcoming years as more buyers are using the internet to search for homes.
One of the biggest real estate technology trends is virtual reality (VR).
One reason VR increased in popularity is due to COVID-19, when in-person home tours were not allowed. Ever since, the convenience and ease of using VR in real estate has made it more popular and its use will continue to increase into 2021.
What exactly is virtual reality? VR refers to a computer-generated simulation. Within the simulation, users can explore and interact in an artificial 3D environment. Here are a few benefits for using VR in the housing market:
- It’s a way for real estate agents to market properties with little investment
- It allows sellers and agents to create amazing 3D home tours
- It allows buyers to partake in multiple tours in a short time without physically visiting them
- It can be used by agents, brokers, and builders to show different ideas for certain spaces that customers can self-decorate
The number of customers who use smartphones is increasing, and will continue to do so in 2021. Due to this, agencies have been creating their own smartphone apps to connect with customers.
- Allow customers to access information regarding properties at any time
- Have eased collaboration between the customer and the real estate agency
- Have eased operations, saved time, and saved usage of resources
New Venture Escrow Is Setting a Trend
New Venture Escrow is paving the way and setting a trend for escrow with innovative technology.
Our VentureTrac 4.0 app can help facilitate the real estate process by:
- Giving you information about your escrow at your fingertips
- Giving real time updates
- Having a secure messaging system
- Including netsheets
Looking for more information and to get started? Contact New Venture Escrow!