Real Estate Market Update: What A Year!

As we finish out the year, the month of November experienced some slowdown in activity compared to October, which is to be expected with our usual seasonal trends.  Not as usual is that the activity was brisk compared to last November, but this is in line with the delayed market earlier this year due to the pandemic.  Even with the renewed lockdowns and continuing COVID concerns, buyers are still on the lookout for homes, especially for larger single family homes, and interest rates and low inventory levels are helping to maintain high home prices overall with the median sale price in San Mateo County at $1.65 million. 

While we expect December numbers to show an even further slowdown in activity, all indicators point to a healthy market to come in the spring.

November 2020 Market Data
Trends to Watch For In  2021
 
According to the 2021 Forecast by Danielle Hale at Realtor.com, the new year is expected to be a strong one for real estate with continued low inventory, low mortgage rates and high buyer demand.  Realtor.com is predicting a 5.7% rise in median home prices and 7% increase in sales volume on a national level.
Here are some key trends that we’ve already noticed and which are expected to have a major impact on the market in the new year:
  1. Millenials and Gen Z: The largest generation in history, millennials will continue to shape the housing market as they become an even larger player. The oldest millennials will turn 40 in 2021 while the younger end of the generation will turn 25. Older millennials will be trade-up buyers with many having owned their first homes long enough to see substantial equity gains, while the larger, younger segment of the generation age into key years for first-time homebuying. At the same time, Gen Z buyers, who are 24 and younger in 2021, will continue their early foray into the housing market.
     
  2. Remote Work:  As remote work extends into 2021 and in some cases employers grant employees the flexibility to continue remote work indefinitely, expect home listings to showcase features that support remote work such as home offices, zoom rooms, high-speed internet connections, quiet yards that facilitate outdoor office work, and proximity to coffee shops and other businesses that offer back-up internet and a break from being at home, which can feel monotonous to some, to become more prevalent.
     
  3. Suburban Migration:  Even before the pandemic, homebuyers looking for affordability were finding it in areas outside of urban cores. The pandemic has merely accelerated this previous trend by giving homebuyers additional reasons to move farther from downtown.
Indeed, we’ve already seen much of this happening, as the condo market seems to be moving slower than usual in many cases, and many of our buyers are looking to move away from San Francisco and into more suburban areas.  Even as we hope to have the pandemic under better control in the new year, these trends are likely to change the face of real estate for the long term.