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As a result, an ever-growing number of would-be buyers could get priced out of the market. 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. We expect to see another gradual reopening process later this year, which in turn could lead to another surge in home sales. In July, the California Association of Realtors (C.A.R.) In July, C.A.R. A continuation of super low mortgage rates. It’s hard to practice social distancing when you live in a crowded city center. Housing markets heavily reliant on entertainment, tourism and hospitality are forecast to have hardships going ahead to next year. But the skyrocketing industry loss ratio seen with California home insurance due to the number of wildfire-related claims has insurance companies not only raising rates, but decreasing coverage and even carrying out non-renewals. 's "2021 California Housing Market Forecast" sees a modest increase in existing single-family home sales of 3.3 percent next year to reach 392,510 units, up from the projected 2020 sales figure of 380,060. Through this year and into next, we could see a corresponding decline of Bay Area home sales and an increase within the Sacramento area. That’s partly due to state’s gradual reopening, which occurred at that time. - Thomas - Thomas PREDICTIONS FOR 2021 HOUSING MARKET The result would be that prices are going to plummet again and the real estate sector will likely cool off. (adsbygoogle = window.adsbygoogle || []).push({}); © 2020, Home Buying Institute (HBI). The 2021 California housing market will continue to rebound thanks to, very low mortgage rates, a rebounding GNP and strong homeownership demand. Of course, COVID-19 is not all the California housing market is facing. California Home Prices Will Continue Rising. Baton Rouge, Louisiana, is expected to see a housing market downturn of 2.3%, the worst in the nation, after the coronavirus pandemic. Mortgage rates are expected to stay within their current low range for the foreseeable future. Disclaimer: This article includes forecasts for the California real estate market in 2020 and 2021. Faster-Than-Average Home Sales. It’s more affordable than most, particularly when compared to the expensive coastal markets like San Francisco and San Diego. U.S. home prices will drop 1.3% year over year by April 2021, the real estate data firm said Tuesday, June 2. A shift in demand from urban to suburban areas. It has certainly been an interesting year for the California real estate scene. The baseline scenario of C.A.R.’s “2021 California Housing Market Forecast” sees a modest increase in existing single-family home sales of 3.3 percent next year to reach 392,510 units, up from the projected 2020 sales figure of 380,060. All of your questions will be answered below. Housing inventory continues to drop and the days on market remains low. Related: 6 Most Affordable Cities in California for Real Estate Investing. With that introduction out of the way, let’s look at five predictions for the California real estate market in 2021. Related: Suburban Real Estate Market Boom Due to COVID-19. Sacramento Housing Market Outlook Into 2021 Sacramento is unique among California’s major real estate markets. Things could be worse than they are, given the seriousness of the public-health crisis. C.A.R. But given the current supply and demand situation in the area, a significant home-price decline seems unlikely. Related: Sacramento housing outlook for 2021. CoreLogic now anticipates that home prices fell 0.1 percent in June and forecasts the decline to reach 6.6 percent by May 2021. Another capital city will take a housing market hit heading into 2021. My housing market prediction for 2021 is that nationwide housing prices will reach new all-time highs by no later than July 1, 2021. CoreLogic expects Las Vegas home prices to drop 11.3% by June 2021, while places like Lake Havasu, Ariz. — where coronavirus cases have resurged most — face the greatest risk of falling housing values. poll conducted in July found that 44% of consumers thought it was a good time to sell, up from 40% a month earlier. 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. Buyers and sellers are beginning to realize that real estate deals can still be conducted, despite the coronavirus pandemic. FHA Loan Limits Increased for 2021, Due to Rising Home Prices, Austin, Texas Housing Forecast for 2021: Stiff Competition Among Buyers, California Conforming Loan Limits to Go Up in 2021, Due to Rising Prices, 10 ‘Tight’ Housing Markets Where Home Buyers Could Struggle in 2021, San Jose Housing Forecast: A Supply-and-Demand Imbalance in 2021, Outlook: Charlotte Housing Market Will Be Very Competitive in 2021, Will the U.S. Housing Market Crash in 2021? that mortgage rates would remain low and drop even further come 2021. All rights reserved. Here’s another housing market prediction that should please home buyers across California. reported that existing home sales went up 6.3% in August from the month prior, a 14.6% year over year (YoY) increase.Â, It’s true that we still have a few months left in the year. Throughout the coronavirus pandemic — and especially in the early stages of it — a lot of sellers began to take their homes off the market due to fears of contagion. Here are top experts' forecats. And many experts believe that, due to low inventory and growing demand, , home prices will continue to rise in 2021.Â. But new data reveals that the market has recovered – it’s as if COVID-19 never touched the real estate industry in California (for most areas). Even as the market began to recover at the end of May, Fannie Mae forecasted that mortgage rates would remain low and drop even further come 2021. The baseline scenario of C.A.R.’s “2021 California Housing Market Forecast” sees a modest increase in existing single-family home sales of 3.3 percent next year to reach 392,510 units, up from the projected 2020 sales figure of 380,060. The price strength is … Thus, it might be better to wait until 2021 when the market is expected to cool down further.” When this article was published, in early August 2020, home prices in most parts of California were still rising year-over-year. In fact, the nation’s real estate market is often referred to as the one “bright spot” in the economy right now, as we approach the fall of 2020. Meaning, general housing market predictions are that housing prices will fall through the end of 2020 before recovering in Q3 of 2021. So while California regulators battle it out with the insurance industry over price spikes and reduced coverage, homeowners in fire-prone areas are experiencing sticker shock, either with their current carrier or when they have to scramble for a new one. As of now, the housing market remains a hot seller's real estate market, with annual price growth reaching record highs and inventory continuing to fall. Unlike the Great Recession, the current economic downturn is … (No, and Here’s Why), Top-5 U.S. Housing Market Predictions for 2021, Mortgage Rate Trends: 30-Year Fixed Outshines ARM Loans in 2020. However, the mortgage rate forecast for 2021 is generally a positive one – mortgage rates are expected to remain low. 's "2021 California Housing Market Forecast" sees a modest increase in existing single-family home sales of 3.3 percent next year to reach 392,510 units, up from the projected 2020 sales figure of 380,060. The Home Buying Institute makes no claims or assertions about future real estate market trends in California or elsewhere. So you can still go out and buy a house. As you can see, the California real estate market is doing well. If you were wondering “Will the 2021 California housing market be a buyer’s market or a seller’s market?”, the last few predictions have probably answered your question. California Housing Market Report (September 2020) At the regional level, sales increased in all major regions from last year in the high double-digits. 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. More from The Active Times: In the greater Los Angeles region, single detached homes rose $22,000 to a new price of $553,000.. San Francisco Bay Area, home prices jumped $35,000 or 3.6% over last month to a new average price of $1 million. reported that the Golden State’s home prices surpassed $700k for the first time. October 1, 2020 COVID-19, Data, Housing Demand, Housing Supply, Market Outlook covid19 housing inventory housing market housing prices inventory real estate … While those statistics are based on the California homes for sale in our vast database, C.A.R’s data supports this trend. Back in June, Freddie Mac’s research team wrote: “Going forward, we forecast the 30-year fixed-rate mortgage to remain low, falling to a yearly average of 3.4%  in 2020 and 3.2% in 2021.”. All of this will cool down around the end of 2021, when hopefully the housing market will be able to go back to normal. And many experts believe that, due to low inventory and growing demand (two upcoming California housing market predictions on this list), home prices will continue to rise in 2021.Â. Updated C.A.R. Housing Market Crash 2021: The housing reports are comprehensive assessments and predictions of US Housing markets drawing insight from NAR, CAR, Corelogic, Wall Street Journal, Freddie Mac, tradingeconomics, statista, and more industry sources. California is the third largest state by size in the United States and the has the largest population out of any state.. With a population of 39.5 million residents, the area consists of 163,696 square miles (423,970 km 2); Los Angeles County and its … Housing Market Predictions for 2021: Will Real Estate Be the Same? What You Need to Know Before You Start Investing in Property. These will be key for making our. Sylvia is the Content Marketing Manager at Mashvisor. Spring is the time of year where everything traditionally comes back to life, and the real estate market is no different. CoreLogic expects Las Vegas home prices to drop 11.3% by June 2021, while places like Lake Havasu, Ariz. — where coronavirus cases have resurged most — face the greatest risk of falling housing values. As our economy’s record-breaking expansion continues into its 126th month, talk of an impending recession is to be expected. Buyers stopped shopping, and many sellers pulled their homes off the market. A few different factors will likely lead to a rise in California home sales in 2021. Thankfully, the Pelican State is not already among the U.S. states with the highest bankruptcy rates. - Thomas PREDICTIONS FOR 2021 HOUSING MARKET The house price trends over the past few months are clear – prices are continuing to grow, despite COVID-19. It will be well into 2021 before you will see a spike in single-family and condo foreclosures. Things could be worse than they are, given the seriousness of the public-health crisis. It’s already occurring. Even as the market began to recover at the end of May. A few of our market insiders spoke of this trend: A suburban migration within the state from San Francisco and the Bay Area to more suburban areas like Sacramento may see an urban exodus of sorts taking place but will invariably boost home sales in the Golden State. A forecast by Haus shows home prices dropping between 0.5 and 2.5 percent from October 2020 to July 2021. “Urban flight” has been in the news a lot lately. Existing Home Sales Rebound. How will all of this shape the California housing market 2021? The housing data provider’s May Home Price Index and HPI Forecast report predicts a year-over-year home price decrease of 6.6% by May 2021. What’s the Best Airbnb Analytics Platform for 2019? This prediction for the California real estate market has been echoed by a number of analysts and economists. Back in April, the national real estate brokerage Redfin reported that more and more home buyers were looking at suburban and rural areas, as opposed to crowded urban areas: “Small towns and rural areas may be set to boom in the wake of the coronavirus outbreak (COVID-19). Grim Foreclosure Predictions for 2021: What You Can Do Now ... over the nation's eight-year housing market boom, and the predictions are eye opening. While the situation may differ from city to city, most local experts are reporting the same California real estate market trends. reported that home sales across the state rose by a whopping 42% from May to June 2020. A recent forecast for the San Diego housing market predicted that home prices could level off through the rest of 2020 and into 2021. Housing inventory continues to drop and the days on market remains low. Mashvisor’s data reveals that California home prices rose from August... #2. At the beginning of 2020, local markets across the state were bustling with activity and competition. These will be key for making our California housing market predictions for 2021. But keep in mind that home prices are unlikely to fall to the bargain-basement prices many were hoping for. In California: Who's enforcing the state's curfew? In June, National Association of Realtors chief economist Lawrence Yun predicted that “people will be much more cautious about living in high-density areas with so many people nearby.”, In July, Navy Federal Credit Union economist Robert Frick stated: “The numbers also verify that many people are leaving, or planning to leave, big cities as telecommuting becomes the norm for many businesses.”. 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