A recent Pulsenomics survey of more than 100 economists, investment strategists, and real estate experts reports a near unanimous expectation that home prices will rise in 2021 by an average of 2.7 percent.
Corelogic’s forecast predicts home prices nationally will have fallen 6.6 percent year-over-year by May 2021.
There are predictions of V recoveries, W recoveries, U and an alphabet soup of recoveries lighting the path back to economic growth – and the only thing we can be sure of, as many a wise old sage has said, is that nobody has a crystal ball.
“In terms of real estate, there are a lot of factors at play here,” noted Nelson Zide, executive vice president, ERA Key Real Estate Services, Framingham, Mass. “Unemployment. Mortgage Rates. The course of this global pandemic, to name a few. But I’m optimist enough to think that real estate will be among the prime movers of our economic recovery.”
Zide is not letting office leases lapse. He is not shrinking square footage.
“Many of our top agents are coming back into the office,” he said. “And they need back office operations and the people to run them.”
He is actively recruiting new licensees as well as experienced agents – and while he firmly believes that face-to-face is the best way for realtors to work, he is investing in new technologies to keep his sales force competitive in today’s virtual environment.
“Technology is more than ever a critical component for success,” Zide said. “We leave nothing off the table in our firm expectation of a robust 2021 market.”
It’s an expectation held by company leaders in other parts of the country.
“People talk about a shortage of inventory keeping a lid on sales,” said Rosey Koberlein, chief executive officer, Long Realty, Tucson, Ariz. “We are actually 20 percent up in listings year-over-year. In our market, it’s not so much a shortage, it’s that homes are selling so much faster, and we are fully confident that 2021 will replicate – or beat – our amazing 2020 numbers.”
Koberlein has some concern that unemployment may impact the entry level market, where inventory is already lowest. But she is bullish on a continuing draw to her market.
“We have always been a destination market, especially for retirees,” she said. “Today, as the pandemic has people re-thinking their values, and/or able to work remotely, buyers from all over the country are either retiring early or buying their dream home now while mortgage rates are making them even more affordable.”
Like Zide, Koberlein is actively recruiting.
“We need all the dedicated agents we can get to stay on top in this busy market,” she said. “Any number of people recently let go from jobs in the hospitality industry are well-suited for independent sales – and our comprehensive new agent training is quickly getting them up to speed.”
As some agents trickle back into the office while others are a bit more hesitant, Koberlein is focused on maintaining the company culture so important to the firm’s success.
“I’m bringing food trucks into our parking lots during lunchtime and setting up socially distanced seating areas where agents can chat while they eat,” she said. “They are so busy, there isn’t a lot of time for that, but a great morale is the first step toward keeping up the pace we expect in the coming months.”
It’s a strategy endorsed by Colorado broker/owner Joe Clement, Re/Max Properties, Colorado Springs.
“It’s all about the agent,” Clement said. “We began two years ago to think about shrinking our space but making better use of it. We sold our largest building and in favor of a new location in a hot spot area. There is an emphasis now on mobile, off-site agents, but there will always be those who thrive on office camaraderie, and we are carefully configuring the public, private, and shared space in these new quarters, including a well-equipped video lab.”
“There are some who think the market will soften a bit next year, and there are a lot of factors to consider,” he said, “not least whether COVID-19 is still impacting our lives. “But as long as rates remain low, and people stuck at home want to improve their living space, there’s every reason to anticipate another very busy year in 2021.”
As bidding wars and multiple offers remain commonplace in most regions, and demand continues to inch prices up, there is little concern among the brokers we spoke to that 2021 will mirror 2008’s debacle.
“Today’s buyers are solid buyers,” said Zide. “Lenders are not making subprime loans, and buyers are carefully pre-qualified. Given a continuing low rate environment, we have every reason to believe that sales volume will increase next year.”