Updates + Love Notes

Our Predictions | 2021 Market

2/2/2021 | cityhomeCOLLECTIVE
Kerri Fukui

Last year was full of many unforeseen obstacles (many, many, many), so if you've been thinking about making a move, it might feel like a bleak and overwhelming landscape out there. While we may not be able to say with absolute certainty what will happen in 2021 (in fact, we'd advise you to avoid anyone who says they can), our outlook is not so grim! Being a real estate brokerage on the forefront of the chaos, we decided to chat with a few of our COLLECTIVE property consultants—Leigh Anne, Brian, Camilla, Jewel, and Joseph—to get their forecast for how this year's shaping up. Whether you're a prospective buyer or seller, check out our tips and predictions below for a bit of insight into this crazy market of ours (and be sure to check out the link below if you're interested in joining us for a roundtable discussion/Q&A about the 2021 market on Feb. 16th!)...

OVERVIEW:

"The year 2020 was one for the books in many ways. In Utah, the real estate scene was one of growth, good interest rates, and low inventory—we broke a 15-year record for the highest number of homes sold in both Salt Lake County and Park City. Both of these markets, while very different from one another, are benefitting from the same three factors: record low-interest rates, strong population growth, and—despite the pandemic—strong job growth. When you take all that and layer in a dramatic decline in existing available homes, a continued housing shortage from delays in new construction (care of the recession), and slowing construction projects due to COVID’s impact on supply chains, you get a market that is drum-tight. Looking into 2021, we expect more of the same. As spring approaches, we’re hopeful that—along with the anticipation of positive vaccine news and declining COVID cases—there will be more existing available homes, and they will likely continue to be snapped up at a record pace." - Leigh Anne Bernal, Broker

RATES:

I’m optimistic about 2021. Even as prices continue to climb, interest rates should remain low (I expect around 3%). Last year, first-time buyers represented 31% of the annual share. - Brian

Think this market is benefitting sellers only? Think again. With these low interest rates, you can score a higher-priced home for the same payments as you would have paid on a pricier home with high interest rates!  - Camilla

It's a bit of a heyday for both the buyer and the seller right now. A buyer benefits from historically low interest rates and the ability to afford higher-priced homes at a reasonable monthly mortgage; a seller is able to cash in at all-time highs. It won't always be this way. As soon as the interest rates start to creep back up, the market will need to adjust accordingly. - Joseph

AVAILABILITY

This year, I expect the market to remain just as robust as last year; however, I am optimistic more homes will come to market as the vaccine takes effect and more and more people become comfortable with the idea of their residences being shown to buyers. - Brian

2021 looks on par to still be a seller's market with low interest rates and still very little inventory.  - Camilla

I expect to see a boom of homes hitting the market in March, but not enough of them to even out the buyer demand. Just like the last two years, buyers will need to be ready to fight. I think many buyers will choose to avoid the maddening scramble of the house hunt and will turn their focus to building a home instead. Many have considered escaping the city for various reasons (closer to work, air quality, affordability, etc), and this might be their chance. - Joseph

I expect home prices to climb but at a more moderate level than in 2020—a break for first-time buyers. - Brian

TIPS FOR BUYERS:

Go in as a backup offer—it's not as certain a position, but you may have a shot at getting your dream home without the fierce competition. - Camilla

First-time buyers might feel like they’ve brought a knife to a gunfight as they go toe-to-toe with more cash-heavy buyers, but the mechanics of buying remain the same: have your financial ducks in order, find the right brokerage, and hire the right agent who knows the sort of space you’re after...then be prepared to move quickly when the right property hits. Last year, over 30% of the total sales went to first-timers…so don’t give up hope! - Brian

Getting an early start in the home buying process is critical, as I expect buyers to pay upwards of a 10% premium on home prices as we move into the summer months. - Brian

If you are buying, make sure you are ready to get into multiple offer situations (an agent can help you write a strong offer). It is not just about price! Deadlines, down payments, contingencies, leasebacks, and more can all be factors that get you the deal. Make sure your agent communicates with the seller's agent to get all the information. - Camilla

Keep in mind that if you are a buyer, a seller isn't going to look at lowball offers when a listing first hits the market, they just don't have to do that in this market. - Camilla

TIPS FOR SELLERS:

The best pricing strategy right now is to list at a competitive price to attract multiple buyers which will drive the price up above the asking price. - Camilla

If you are selling, set up an area as a "home office." Many buyers are looking for that right now, and that could make your place stand out. - Camilla

My best advice for navigating what is sure to be a crazy 2021 real estate market is to be uber-prepared and dialed in on what it is that you want. Have your finances in order, a vetted preapproval, and flexibility to see homes quickly. Get ready to make decisions quickly. Being prepared and getting creative will put you in the best position to get the space that you want. - Jewel

If you think your home is a little bit unique and might be a hard sell, this could be the perfect time to sell. There are lots of buyers looking at very few properties, and buyers are more willing to do repairs and remodels to make it work for them. - Camilla

The main catalyst driving home sales is our rapidly growing job market. In the last decade, Utah ranked first in the nation for highest employment growth (29.4%) and took home the blue ribbon for its rate of population growth (15.5%). Seems as though the secret’s out: this Land of Zion is a pretty fantastic place. I expect an increase in out-of-state buyers due to growing opportunities for remote work. - Brian