REAL ESTATE MONTHLY OVERVIEW: DECEMBER
Real Estate Market Remains Strong in December.
As the Covid-19 pandemic gripped America in the Spring, the residential real estate market showed considerable resilience in the face of uncertainty and economic instability. Despite a tumbling stock market and rising unemployment claims, residential prices maintained all-time highs and consumers continued to facilitate real estate deals. While other sectors entered recovery mode on the backs of vaccine prospects, residential prices continue to produce eye-popping figures. In fact, Zillow’s one-year forecast for housing prices expects the trend to continue. Zillow forecasts that the price of real estate will grow an additional 7.9% through October 2021. Per Norada Real Estate Investments, “the first week of November mark[ed] the 13th consecutive week of double-digit price appreciation.”
Those with a bearish outlook on the residential market—and US economy as a whole—point to rising prices as a byproduct of low interest rates. However, these pessimists ignore one significant driving force: demand. As a consequence, there is a lack of supply to keep up with rising demands. Any foundational economics course can see how the lack of supply and heightened demand catalyzed such robust growth. The rapid demand is apparent from the statistics. Zillow reports that the average days on market in 2020 was merely 25 days. This is a significant and promising drop from an average of 30 days on market in 2019. Thus, real estate agents are reaping the financial rewards of a strong market. Additionally, agents can take on more listings because they are spending less time working each deal. As such, 2021 is lining up to be a particularly lucrative year for real estate investors, representatives, and dealmakers.
