Dr. Lawrence Yun, National Association of Realtors (NAR) Chief Economist shares with ProspectingToday where his research shows the real estate market is headed and why.
Dr. Yun begins by saying “what a year of surprise, we did not anticipate this”, and isn’t he right? However, the way the housing market has fared is also unanticipated by many. The 2nd half of 2020 home sales activity has increased and will most likely end higher than previous years. In fact, Yun states that most homeowners have felt calm and optimistic about the housing market during the pandemic.
The biggest issue our nation is currently facing is lack of inventory, which is a drastic difference from the 2008 crash. Even though clients have been continually buying and selling during the pandemic, the fix for a lack of inventory is an increase in new construction. During the shelter in place, home building slowed down causing a 20% decline in inventory nationwide. The exceptions lie in big cities such as San Francisco and New York City where buyers seem to be hesitant, or looking to move out of a big city. Yun believes this is partially due to the work from home flexibility that the workplace is now offering.
What will 2021 bring?
Yun anticipates the market to continue improving through 2021 with a 12-18 month trajectory to full recovery. Although the real estate market seems to be thriving, there are more agents now than ever. Take the time to focus on your database and continue nurturing those relationships. Anticipate seeing a small influx in foreclosures as government assistance subsides, however, Yun does not expect the number to be drastic. He attributes this to the lack of inventory resulting in plenty of ready buyers. Those in financial trouble should be able to quickly sell their home without having to go into foreclosure.
Yun does not anticipate the upcoming election to affect the housing market. Past trends have shown no drastic change in a Democractic vs. Republican term. The exception for this would be luxury home sales depending on new tax policies.
Don’t forget to enroll in NAR’s 2020 Realtors Conference which will be 100% virtual and offer great insight for agents.
What did you find most interesting about what Dr. Yun had to say about the current housing market?