What to expect in the real estate market in 2021 and what’s happening now? I know it’s hard to tell with everything we have going on. I get it. I’ve seen so many different markets over the last 20 years, and after this unprecedented and unfamiliar market, I’ve seen it all. Let’s start by looking at the most recent data from July of 2021 on a year-over-year home price appreciation.
• FHFA is showing that the home prices have appreciated by 19.2%.
• CoreLogic is showing year-over-year appreciation at 18%.
• And the S&P/Case-Shiller index is showing 19.7%.
Crazy, right? But what does this mean going forward? Ivy Zelman says closings are set to decline roughly 10% year-over-year in the second half of 2021. And home price appreciation is on the cusp of flipping to a decelerating trend. This does not mean that your home will decrease value. It means that it will appreciate at a slower rate. If you’re looking to buy now, now is the time to get in on a large amount of appreciation on your new home, right off the bat.
Now, according to Ali Wolf, interest rates seem to be the biggest factor in today’s market. Ali said, “It’s a real possibility in the next year and could bring prices down.” Further, other economic, financial and competence challenges could also result in a drop or flattening of home prices, but a drop or flattening in home prices is a far cry from the crash we saw during the Great Recession. The economy is recovering, just not as quickly as you would hope. The 30-year fixed just jumped over 3% as recorded by Freddie Mac. It’s crazy that we’re talking about a rising interest rate environment with those numbers, and that has jumped as they’re starting to see indications of a tapering and buying mortgages. The market is still hot and buyers are still active. Look out for more information about the housing market and how it may affect you.