This year has been nonstop uncertainty. The coronavirus pandemic led to shutdowns and major changes to our everyday lives. Those changes are likely to continue as we head into winter. Many cities have been hard-hit, not only in terms of public health, but also economically. However, a new survey ranks Raleigh-Durham No. 1 and Charlotte No. 11 for expected growth in housing construction next year among the nation's 80 largest markets. Experts say it's being driven by continued migration to the state. Wake County is growing by an average of 62 people each day (including births, deaths, and people moving).* In terms of real estate transactions, Wake County has had a robust real estate market over the past six years which grew at a rate of 7.9% annually.**
National statistics provide context but it's important to understand the hyper-local market trends and how that data should guide and influence your housing decisions.
Despite everything, the housing market is the one thing that's been consistently strong this year. So, what do experts think next year will bring? Will that positivity hold steady, or are we in for a bust?
Rising Prices
If inventory remains low into early 2021, it's possible that home prices will continue to go up. The median asking price for properties in September 2020, according to Realtor.com, was $350,000. That's up 11% compared to last year. Inventory has declined 39% year-over-year, despite a quick burst of new listings in August. Increased demand and a dwindling supply are great for sellers looking to sell. In spite of higher home prices, when we compare the amount increase of the mortgage payment with that of wages, housing is still affordable for buyers due to lower mortgage rates.
Home Buying Activity to Remain Very Strong in 2021
Suburbs Reign Supreme
There has been a shift in interest away from urban areas, as many people are packing up to find homes with more space and less proximity to others. Some of the most popular areas in 2020 have included Colorado Springs, CO; Reynoldsburg, OH; and Rochester, NY. We could see continued flight from urban areas to suburbs in 2021.
Builder Confidence
Despite all of the headwinds and what feels like a barrage of negative information, there is some optimism in housing starts. Consumer confidence was high in September, and builder sentiment similarly seems to be at an all-time high.
Could There Be Downsides?
While there are some indicators of positivity, there are also potential negatives that could come into play. Unemployment numbers are still high, and rolling lockdowns throughout the winter could cause those numbers to rise. Some predict that foreclosures could also rise as a result.
When facing uncertainty and anxiety, there's a tendency among consumers and would-be homebuyers to hoard their cash. Personal savings rates have actually gone up recently, but that means there may be less spending going on, particularly on bigger items like houses.
Finally, while there are some unnerving indicators, we do know with almost certainty that record-low mortgage rates will hold. The fed has signaled their intention to keep rates low for the foreseeable future.
Bottom Line
When you're ready to move, understanding how the current market should influence your buying and selling strategies will protect your best interests and bottom line. Give me a call today...I'd love to help!
**Wake County Register of Deeds
Mobile: 919-675-5366
E-Mail: Jean.Scott@kw.com
Two Locations to Better Serve You:
Raleigh: 4700 Homewood Ct., Suite 200, Raleigh, NC 27609
Wake Forest: 1744 Heritage Center Dr., Suite 201, Wake Forest, NC 27587
