A lot of people are wondering about what might happen with the real estate market throughout 2021, so today I’ll be sharing my predictions.
Real estate, like any other market, revolves around supply and demand. In order to predict what we may see in the coming months, it’s important to look at what affects these two factors. Demand is typically influenced by the economy, which has been doing great lately, and our incredibly low interest rates have caused buyers to flood into the market. It’s an inverse relationship: low rates mean high demand, while high rates mean low demand.
“For prices to go down, we’ll need a lot more supply in order to satisfy demand.”
On the other hand, our current supply is incredibly low. Home inventory is down 65% from last year, meaning that many buyers want homes but there are very few houses to choose from. As a result, home prices have skyrocketed.
As for the future, I expect interest rates to rise and inventory levels to increase. However, I don’t think this means that prices will go back down. There’s such a huge gap between supply and demand right now that even if interest rates sharply increase, there’s still going to be many motivated buyers. For prices to go down, we’ll need a lot more supply in order to satisfy demand.
So, my prediction is that prices will continue to rise throughout the rest of the year. If you have any questions or would like to jump into the market before prices increase even more, feel free to reach out to me. I look forward to hearing from you soon.
