As part of a year-end review, the National Association of Realtors held a virtual Economic and Real Estate Summit. The topics covered are listed below and give an outlook of what a post-election real estate market may look like in 2021.
Topics covered in the video:
- 2020 year-end review of real estate market performance
- 2021 and beyond real estate market expectations
- Challenges and risks facing the real estate industry
- Residential and commercial real estate markets
- Topical public policy measures
2020 Real Estate Forecast Summit from NAR on Vimeo.
Recovering From The Unemployment Crisis
There have been some interesting trends in the economy throughout the pandemic. Unemployment has skyrocketed in every state, but not in equal percentages across the board. The working class seems to have been hit much harder, according to the above forecast, when compared to higher-income workers. We’ve seen boosts in the housing and tech sectors, but low-income workers are seeing 4x the rate of unemployment than high-income employees.
“We won’t see the labor market go back to the 3.4% unemployment we had before the pandemic. It’ll probably level out around 5%. In normal times, that would be good. But based on how far we got in lowering the unemployment rate, that’s still quite elevated.” – Dana Peterson, chief economist @ The Conference Board
Price Gains in Real Estate Expected to Continue
To give context to the next two images…
More than 20 leading economic and real estate housing experts (including NAR) participated in a consensus economic and real estate forecast to collectively come to terms with how next year is likely to look. A lot can change under a new administration, but even with a new president-elect, price gains are expected to continue.
NAR’s economic forecast projects GDP growth of 3.5% and an annual unemployment rate of 6.2% in 2021. Housing prices are expected to climb 8% next year and 5.5% in 2022, with 30-year fixed mortgage rates of 3.0% and 3.25% for 2021 and 2022, respectively.
“The group said remote work will continue to be a factor in real estate markets but that the share of Americans working from home will decline post-pandemic, from 21% this year to 18% in 2021 and 12% in 2022.”
Images from the National Association of Realtors