A year of surprises, 2020 has been a record-breaking year for the real estate industry, with astronomically low mortgage rates and homebuyers influenced by current events including a worsening pandemic. As we dive into 2021, experts are predicting another record year for the real estate industry with continuously low mortgage rates and northerners flocking to the Sunshine State.
Prediction #1: Home Prices will Increase
One prediction that homeowners will be happy to hear is the continuing increase in home prices. Danielle Hale, a chief economist at realtor.com, says to expect sales to grow 7 percent, and prices to increase another 5.7 percent. This increase will be met by strong demand and a recovering economy, in addition to still-low mortgage rates. While we can expect higher home prices, the increase will take place at a lower rate, and buyers will also have to shop mortgage rates as lenders begin to push rates up slowly.
Prediction #2: First-Time Home Buyers Face More Obstacles
While Generation Z and millennials have been among the largest players in the 2020 real estate industry, rising prices and higher mortgage rates may make it difficult to secure a first home. For this reason, new home starts are expected to continue to grow at a 9 percent rate. Builders may face added troubles in 2021, especially as construction faces a supply and demand problem.
Prediction #3: Suburban Homes Become More Desirable
As COVID-19 leaves its lasting impact on the world, many essential workers and remote professionals will rethink their lifestyle choices and residential needs. Living in the center of a city may lose its appeal, and those in the market for a new home are likely to seek a more suburban lifestyle. Studies like this one report that nearly 39% of city dwellers are considering leaving their cities for a slower pace of life. Other factors, like a remote workforce, attribute to suburban dreaming.
Prediction #4: Florida’s Population Will Increase
One thing we’re certainly expecting is a steady growth of Florida’s population size in 2021, with the Demographic Estimating Conference predicting an average of more than 303,000 people moving to the Sunshine State a year. We are also noticing snowbirds are opting to stay in Florida, as opposed to return to their northern homes. These numbers directly impact the real estate industry in 2021, with those relocating to the sunshine state in need of homes and places to live. For landlords in Sarasota and the surrounding areas, this is welcome news and translates to higher rental rates.
Prediction #5: A Surge in Short-Term Rentals Make for Strong Investments
In 2021, as the economy begins to re-open Florida maintains a rather relaxed response to the pandemic in comparison to other tourist destinations, those visiting the Sunshine State are likely to seek out short-term rentals through services like Airbnb and VRBO. We can see this by the clear demand. When services like these third-party short-term rentals reopened properties on May 19, bookings doubled within the first 24 hours. This is great news for investors in the Sarasota market or for out-of-state homeowners looking to secure their investment.
Moving forward, we are expecting a thriving 2021 for the real estate industry with low mortgage rates, a sellers’ market, and investment properties yielding steady returns. For sellers, now is a prime time to consider listing your home heading into 2021, and for home buyers, it is an equally attractive time to purchase with low mortgage rates and fast-moving inventory.
If you are in the market to buy or sell a home in Sarasota and its surrounding areas, contact Medway Realty for a knowledgeable real estate expert who can manage the purchase or sale of your home.