The new year is upon us, which means it's time for our 2021 real estate predictions. Below we've identified 7 key real estate trends for the coming year, many of which have been shaped by the tumultuous events of 2020. For a look back at last year's predictions, check out this article from our blog.
Our 2021 Madison real estate predictions
#1: Mortgage rates will remain historically low for the whole year.
The Federal Reserve has indicated it's committed to doing what it can to keep mortgage rates low for the foreseeable future. If this holds true, this means rates for a 30-year mortgage should be around 3 percent for all of 2021.
#2: Home and condo sales will be at or above the levels from 2020.
Low mortgage rates will fuel a strong demand for Madison area real estate. Home and condo sales could rise as much as 5 or 10 percent in 2021. Our website traffic is up significantly from where it was a year ago, which leads us to believe that local home and condo buyers will be very active in the months ahead.
#3: Inventory will remain low.
2021 will be another year of low inventory in many locations and across many price points. Working with a professional will be a must for buyers and sellers who wish to successfully navigate the complexities of a low-supply market.
#4: Home and condo prices will rise once again.
We anticipate Madison area home and condo prices to rise by 4 to 5 percent in 2021. Low interest rates, high demand, and low inventory will lead to rising prices for the ninth straight year in Dane County.
#5: Many buyers will seek a larger house in 2021.
The increase in work-from-home households will cause many consumers to search for homes with more bedrooms and office space -- and the competition will be fierce. If you need to sell your current home in order to move up to a larger one, be sure you hire a professional who has a strong track record for helping clients buy and sell at the same time.
#6: Long distance moves will be more common.
With more work-from-home flexibility, we expect more people to make long-distance moves based on personal, family, and quality of life reasons. We anticipate this new level of flexibility will lead to to more people flowing into and out of the Madison area. This is another reason why we expect strong home and condos sales in the year ahead.
#7: The market will be flooded with new agents.
Membership at the National Association of REALTORs is already at an all-time high. With so many people facing pandemic-related employment challenges, we believe the number of new licensees will spike in 2021. For the good of the industry it will be important for brokerages and teams to provide new agents with a high level of training, mentoring, and support. At Mad City Dream Homes, we want you to know we're committed to helping all of our agents grow -- personally and professionally -- throughout their entire career.
Get ready for another wild real estate market.
If you expect to buy and/or sell in the year ahead, we recommend you start planning for your move right now. Consult with one of our real estate professionals, and get a head start on the competition. You'll make your real estate dreams come true by being proactive and being prepared for any potential challenge in the year ahead.
References for this article
In addition to performing our own market research, we've relied on forecasts from the National Association of REALTORs and Buffini & Company to compile our predictions: