2021 the Greater Palm Springs Area Housing Market Forecast
It’s that time of year again, 2021 California Housing Market Forecasts are popping up online. The year 2020 will certainly be one to remember, with new realities and norms that changed the way we live.
From Real Estate experts to Bubble Pundits, what are they saying about 2021 the Greater Palm Springs Area Housing Market Forecast?(Note: This information was taken on 11/11/2020. Some organizations will update their information frequently).
What will the housing market look like in 2021?
CALIFORNIA ASSOCIATION OF REALTORS®(California Housing Market)
The baseline scenario of C.A.R.’s “2021 California Housing Market Forecast” sees a modest increase in existing single-family home sales of 3.3 percent next year to reach 392,510 units, up from the projected 2020 sales figure of 380,060. The 2020 figure is 4.5 percent lower compared with the pace of 397,960 homes sold in 2019.
The California median home price is forecast to edge up 1.3 percent to $648,760 in 2021, following a projected 8.1 percent increase to $640,330 in 2020 from $592,450 in 2019.
The baseline scenario assumes a COVID-19 vaccine will be available in the first half of 2021, and just a modest rise in cases in the coming winter.
A worst-case scenario would occur if there’s also a rise in foreclosures, zero economic growth, and Congress remains deadlocked over federal economic stimulus plans. If those things were to occur, the forecast would shift to a 9.8% drop in house sales and a 16.4% drop in the median house price.
The average for 30-year, fixed mortgage interest rates will dip to 3.1 percent in 2021, down negligibly from 3.2 percent in 2020 and down from 3.9 percent in 2019, remaining low by historical standards.
Southern California likely will see a similar pattern to the statewide trend, according to C.A.R.
Freddie Mac (National)
Total housing inventory declined 18.6% in August from the same month a year ago. We forecast house prices to increase by 2.4% quarter over quarter in Q3 2020 and 5.5% over the calendar year. Next year look for house price growth to moderate to 2.6%.
FirstTuesday Journal (Riverside County)
As the housing market continues to adjust to the 2020 recession and COVID-19 social distancing measures, some are pointing to still-high prices as evidence of a recession-proof market. But today’s prices are inflated by historically low mortgage interest rates, which have provided a boost to buyer purchasing power. Once buyers and sellers adjust to these new low interest rates, today’s sticky pricing will slide, dragged down by job losses, reduced incomes and – once the foreclosure moratorium is lifted in 2021 – distressed sales.
Home sales volume in Riverside will begin to recover from the 2020 recession around 2023, at which point first-time Generation Y (Gen Y) homebuyers and Baby Boomer (Boomer) retirees will converge to drive up sales volume and prices. In the meantime, expect reduced home sales volume to continue and prices to follow during the recessionary years of 2020 and 2021.
Redfin CEO Glenn Kelman told CNBC the pandemic-driven boom in the housing market is likely to last into next year. “There are so many people now who have decided they’re not going to be able to buy a home by year-end, who expect to do so going into 2021,” he said. However, he said, “There’s no way it can last forever.”
Keller Williams (National)
There’s a major potential pitfall lurking in the market, which is the potential for a high number of forbearances, according to Gary Keller – the founder of Keller Williams. If we get to the second quarter of 2021 and the number of loans in forbearance remains high, we could see homes begin moving onto the market and foreclosures increase. ““We’re gonna have a year or two of tough, and then we’re going to slowly start to climb out,” Keller said. “That’s what I believe.”
In 2021, America will experience a shift in the housing market, as millions of borrowers will emerge from forbearance plans. RealtyBid (Online Real Estate Auctions) and parent company Covius Tuesday hosted a webinar entitled “A 2021 Housing and REO Outlook: What to Expect and How to Prepare.”
Avenue Properties : Mark Kunce
In the eye of the pandemic, resort towns like Palm Springs and La Quinta are evolving into the permanent go-to places for homebuyers—especially those scurrying from big cities like Los Angeles and Orange County and with the leeway to work from home. Now that tens of millions of people have experienced working from home for months, the trend is likely to continue. I believe there will be a permanent desire for employees to work from home 2-3 days a week and companies will allow it to retain employees. People want to buy homes with pool, out-door living space, more land for their children, and homes with home offices. People want to buy homes that are in less densely populated areas of their city or in a different state. Therefore the Greater Palm Springs Area home prices will continue to increase, just at a slower pace than we’ve seen in the past few years.
- Tips For Home Buyers: Even as home prices continue to rise, affordability is working in favor of today’s homebuyers. According to many experts, rates this low are off-setting rising home prices, which increases buyer purchasing power – an opportunity not to be missed, especially if your family’s needs have changed. If you now need space for a home office, gym, pool, and more, it may be time to reconsider your current house. Buyers, do not wait on the sidelines. Instead, cash in on these incredible rates now.
- Tips For Home Sellers: Will the seller’s market continue? Probably. The market won’t tank anytime soon, yet we may be nearing price peaks. Anyone thinking of putting their home on the market should not wait. A seller will always negotiate the best deal when demand is high and supply is limited. That’s exactly the situation in the real estate market today. In 2021, when the pandemic is hopefully behind us, there will be many more properties coming to the market. Don’t wait for that increase in competition in your neighborhood.
- Tips For Investors: The Greater Palm Springs area is a great place to buy a rental property. Homes cost less here, yet fetch nearly as much in rental rates as the rest of the state. Therefore, if you are looking to invest, you may want to consider a buy and hold strategy over flipping or wholesaling.
Note: Housing Prediction is a interesting and popular topic in real estate. But don’t let it dictate your home buying/selling decision. Always concentrate on your goal, your big why. In the end, there are only two ways to make money in real estate. You either hit the right timing of the market or you have enough time in the market. That is, you either happen upon the right moment to buy your home or you hold it long enough for time to make your purchase right. Nobody is able to time the market. But you most certainly can count on the later.
What do you think? Will the median home value in the Coachella Valley go up in 2020?
Disclaimer: This story contains predictions and forecasts relating to home prices and other aspects of the housing market. Those forward-looking views are the equivalent of an educated guess and should be treated as such.