In other words, homes are less affordable now than a year ago. As urban living conditions improve, high rent becomes less of factor; reductions in urban rents will entice some new residents; however, some renters who became accustomed to more affordable suburban rents may not return due to costs. Their Unsold Inventory Index (UII) (a metric that represents how many months are needed to sell all the houses for sale on the market based on the current sales pace) dropped to 2.1 months in August. A few different factors will likely lead to a rise in California home sales in 2021. So far, experts are optimistic that we will not see a housing market crash throughout the rest of 2020. Although sales dropped during the first major wave of the coronavirus, they began to quickly bounce back. Keep in mind the first US housing market forecast which is that home prices will remain steady or drop just a few percentage points. Nearly half (48%) of respondents disagree that real estate understands how past policies and practices have contributed to systemic racism. More than 80% of participants agreed that COVID-19 accelerated the shift in retail that likely would have occurred over the next few years. With low mortgage rates driving demand and tight inventory, sellers are likely to see value gains and continue to have the upper hand in the market. Experts at Zillow forecast home sales to bottom out in Q2 2020 before they slowly recover to baseline levels by the end of 2021. Pricing held up quite well. But as the COVID-19 pandemic is affecting both sellers and buyers in 2020, the market’s dynamics are shifting. "Although the exact contours of the economic recovery remain uncertain, we expect current equity gains, fueled by strong demand for available homes, will continue to support homeowners in the near term.". It’s true that increasing home prices will make buying a house in California even less affordable for many residents. However, that rebound is depending on the pandemic’s trajectory. So even with rising prices, some buyers may find relief with this, One of the reasons home prices are going up in the, It’s true that we still have a few months left in the year. 6. While sales increased 24% over August, they were still down 78% from the prior year, Auction.com reported. When it comes to home prices, for example, some markets could sail through the current crisis with a mere slowdown in price appreciation, but others could feel a measurable drop. INCREASED MULTIFAMILY INVESTMENT IN 2021. "Delinquencies are expected to rise given that an unknown percentage of borrowers currently in forbearance will likely be unable to resume making timely payments. For years, the US housing market was described as a strong seller’s market. Jennifer Okhovat, a real estate agent with Compass in the Los Angeles real estate market told Mashvisor: In Los Angeles, we are not feeling any signs of the market slowing down as of now. The company expects a whopping 50% – 60% decline in home sales from its pre-coronavirus levels. The house price trends over the past few months are clear – prices are continuing to grow, despite COVID-19. Related: Suburban Real Estate Market Boom Due to COVID-19. The price increase illustrates the extent to which federal rescue programs and a supply-demand imbalance have been counterweights to economic pressures from the pandemic. Industrial properties, data centers and single-family homes are expected to rise in value, while retail and hospitality will see the largest decline. At the end of the second quarter, there were 1.7 million homes, or 3.2% of all mortgaged properties, in negative equity. Use analytics to find lucrative traditional or Airbnb properties in a matter of minutes. Companies that invested in digital capabilities saw great success with work from home policies, and 94% of real estate professionals agree that companies will allow employees to work remotely at least part of the time in the future. Ashley Baskin, a licensed real estate agent who serves on the advisory board for HomeLife Digest, pointed out that: As for the wildfires, we are expecting to see home prices drop in the affected areas. 2. The report, which includes proprietary data and insights from more than 1,600 leading real estate industry experts, explores how COVID-19 accelerated many existing trends like retail footprint reductions, while it spawned new ones such as an increased focus on social justice and health and wellness, and stopped others in their tracks like the appeal of big cities. For reprint and licensing requests for this article. These will be key for making our California housing market predictions for 2021. Emerging Trends in Real Estate® 2021 Download the full report Demographic shifts continue to shape investor demand and city rankings First introduced in the 2015 report, eighteen-hour cities continue to dominate the Top 10 overall real estate prospects, powered by strong growth, homebuilding outlook, affordability and job prospects.

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