Economists expect that interest rates will continue at low levels because of low inflation expectations and the Federal Reserve's current monetary policy. The U.S. economy is projected to register slow growth during 1Q2021 and accelerate afterward due to effects of the vaccinations and the stimulus bill. Mortgage refinancing, however, will slow as lenders add more requisites and the pool of households able to refinance diminishes.
Pricing & Inventory
The 2021 housing market will be characterized by strong demand with low inventories accompanied by positive price growth. Inventories of homes priced under $300,000 will be especially low, affecting sales in that price range. Price growth will be positive because of stable demand. Low-skill/low-wage earners were hurt the most economically, and they are typically renters, not homebuyers.
Homebuilders are trying to satisfy demand in the lower price cohorts by building homes in the suburbs or outer city borders where land costs are lower. This trend was prevalent before the pandemic but has accelerated during COVID-19. A realtor who specializes in working with clients who are selling their existing homes in order to move into a new build, I work with many new home sales consultants in Austin and surrounding areas - many of them are reporting rapid price increases, waiting lists, and a large backlog of customers/future closings.
The Center's estimated 2021 single-family percent changes for the state and the major Metropolitan Statistical Areas (MSAs) are shown below in Table 1.
In 2021, the Center expects:
- overall land prices to increase by 5 percent or more;
- the number of sales to increase by 10 percent;
- total dollar sales volume to increase by 12 percent; and
- small properties to sell well.
If you’re thinking of taking advantage of this seller’s market by selling your current home, but are wondering if now is a good time, give me a call. I’d be happy to take a look at the market data in your neighborhood, and discuss your options to find out if selling and making a move makes sense for you. Visit www.GrantWhittenberger.com for more Central Texas housing market updates and real estate investing tips.