We experienced unprecedented times during 2020 due in part to the coronavirus. With all the worry about Covid 19 and the stay-at-home orders, people feared the worst about the 2020 real estate market. However, Covid 19 certainly "gave a shot" in the arm to the housing market. What people feared, didn't happen. The market recovered quickly as the country started to open up and it never looked back. Buyers came out in full force and home values rose. The National Association of Realtors shows that home sales in October 2020 increased 27% from October 2019.
Now that the Covid 19 vaccine is here, consumers are wondering how it will affect the 2021 real estate market. Will the market remain hot or cool down? Early on, sellers took their homes off the market as buyers were uncomfortable visiting prospective domiciles. As time went on and more information became available about Covid, the market picked up steam. In spite of the good year in 2020, a key question needing an answer is will more owners put their homes on the market to increase the much needed supply?
The Covid 19 vaccine is already increasing consumer confidence and comfort levels of the American people. However, it will take time since the rollout of the vaccine is seeing distribution issues. The hope is that states such as New York and California will come back from the detrimental effects Covid 19 has had on them. California saw negative population growth in 2020 for the first time since 1900, the earliest year Census Bureau information is available. As more jobs become mobile/remote, crowded, expensive cities like San Francisco and New York are losing population and people are flocking to states such as Texas, Tennessee, Idaho and Florida.
The World Health Organization (WHO) is studying what it will take for herd immunity against Covid 19. The WHO states that herd immunity against the measles requires 95% of the population to take the vaccine. For polio, they say it's 80%. According to Clare Trapasso with Realtor.com, the new strains of the virus that are circulating will impact the timing of herd immunity.
The Start of the 2021 Market
The real estate statistics for the month of January won't be out until some time in February. However, early indications are the market will remain strong in 2021. In more conservative midwestern states like Iowa and Illinois, Realtors are indicating that home values are remaining high during this cold January winter month. In Florida, Realtors tell us there are so many buyers that they are staying in hotels and rental properties just waiting for homes to go on the market. So with the overabundance of buyers, many sellers will need to place their houses on the market to ease the hyper demand. This will take time. All in all, indications lead to a great year.
Key factors such as the quick and successful roll-out of the Covid 19 vaccine, the election of President Biden and the current durth of homes on the market will dictate the success of the 2021 real estate market. Realtors and other real estate professionals are predicting an excellent market this year. It may take a step back from the hot market in the second half of 2020, however, it will most likely be more of a leveling off than a cool down.