Real Estate Predictions for 2021

Heck of an year, to put it mildly. In the desire for brevity, permit me to keep it short n’ sweet. Here’s my 2021 predictions.

The Plague
The very obvious real question is if it will have a negative effect on real estate due to Covid-19/Coronavirus. Short answer, Yes. Long answer, Yes again. This especially so from the shopping center retail space. Restaurants are dependent upon the residual wages of an affluent society. America is definitely an affluent society. The per capita for merely every societal accoutrement is away from the charts. The overabundance of restaurants, gyms, spas, grocers, and in many cases tire repair shops pale when compared with other societies, and in many cases Western Democracies. Ergo, America has suddenly realized doesn’t necessarily need several restaurants because it thinks it requires, the fact that eating in your house is more economically sane – currently of uncertainty.

My informational sources, for example quarterly reports from Deloitte & Touché and also the CCIM (Certified Commercial Investment Managers), all indicate that workplace (for very obvious reasons), retail, multi-family are usually in for a rough patch the following 18 months to mid-2022. But for industrial and warehouse space, own life is exceptional great. The need to stockpile resources and provisions for consumers is reasonably apparent.

On a miscellaneous note, home sales – which is not attached to commercial property, but is residential real estate investment, has been doing exceptionally well. This robust disposition is caused by many Americans with abundant resources (and job stability), so that the purchase of homes and/or a better home. This is also part-and-parcel within a fear of raising mortgage rates; the requirement for ownership, personal space and solitude; and likely a bunker mentality – wherein existentially some fear that hordes of men and women will desperately roam for food within a Dawn in the Dead fake realism (and from your overload of cable news) – but superficially there is absolutely no threat, but only in your psyche. It’s important to remember, that rapidly chaos, the unemployment rates are still only 6.7% adjusted November 2020.

Interest Rates
As I correctly predicted recently, rates hit a whole new low, spurring an increase in market activity. Based on the economists’ predictions I’ve read for 2021 – nevertheless there is some dissension of their mindsets, rates will fluctuate to and fro, but must be about a fifth of your point lower then where we were holding at year end 2020. That calculates to about 2.90% with the 30 year fixed price.

Sellers’ Market
In most localities inside US, will probably be a Sellers’ market, that has an inverse relationship with demand. Meaning, if you have higher buyer demand, it is going to result in an increase in house prices, which will result inside a Sellers’ market.

Broker Productivity
This revelation will be dear and close to my heart, given I was previously a commercial real estate investment broker going back twenty years ago before I started to obtain homes by myself account. The fusion of technology for residential brokerage has been from the making for the long time and may see a more effective – perhaps proficient at the same time, variety of brokers emerge as the volume of closed transactions is anticipated to increase in 2021. This is due partially as a result of technology advances. As a contrast, in 2019 the average amount of sold homes per residential brokerage was 50.7 homes. In 2021, there is predicted to be marked improvement on that number, with in addition the typical broker taking a shorter time to close transactions.