Where will home values go in 2021?
Broomfield home values in 2021 will continue to be determined by an imbalance of supply and demand. If supply remains low and demand is high, prices will continue to increase. As CoreLogic explained:
“Home price growth remained consistently elevated throughout 2020. Home sales for the year are expected to register above 2019 levels. Meanwhile, the availability of for-sale homes has dwindled as demand increased and coronavirus (COVID-19) outbreaks continued across the country, which delayed some sellers from putting their homes on the market.
While the pandemic left many in positions of financial insecurity, those who maintained employment and income stability are also incentivized to buy given the record-low mortgage rates available; this is increasing buyer demand while for-sale inventory is in short supply.”
The current number of single-family homes for sale in our local MLS is 4,668. At the same time last year, that number stood at 12,318. We are entering 2021 with approximately 7,600 fewer homes for sale than there were one year ago. Here in Broomfield the numbers are staggering, as there are just 61 single-family homes for sale when there were 191 last year.
However, there is some speculation that the inventory crush will ease somewhat as we move through the new year for two reasons:
1. As the health crisis eases, more homeowners will be comfortable putting their houses on the market.
2. Sadly, Some households impacted financially by the pandemic will be forced to sell.
Low mortgage rates have driven buyer demand over the last twelve months. According to Freddie Mac, rates stood at 3.72% at the beginning of 2020. Today, we’re starting 2021 with rates one full percentage point lower than that. Low rates create a great opportunity for homebuyers, which is one reason why demand is expected to remain high throughout the new year.
Taking into consideration these projections on housing supply and demand, real estate analysts forecast homes will continue to appreciate in 2021, but that appreciation may be at a steadier pace than last year. Here are their forecasts:
There’s still a very limited number of homes for sale for the great number of purchasers looking to buy them. As a result, the concept of “supply and demand” mandates that Broomfield home values will continue to appreciate.
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