Realtor.com® gathers housing data from MLS listings across the country while also collecting information on consumer interest (which homes they are saving, which filters they are applying for their home search, and more). The intersection of these two data sets enables realtor.com® to track housing market trends nationwide and at a zip code level.
During the Future of Real Estate Summit, realtor.com® Chief Economist Danielle Hale discussed housing market trends over the past year and where the market stands today.
A rebounding economy and low interest rates will continue to drive market activity and trends nationwide
There was a lot of variability in the housing market last year. In March 2020, at the onset of the pandemic, home buying and selling nearly ground to a halt before rapidly accelerating in early summer for a record-breaking year.
Now, at the beginning of 2021, the housing market has weakened slightly due to housing inventory constraints; however, Hale said she’s expecting “continued market growth on top of a stellar 2020.”
Hale’s team predicts overall continued economic growth and further home sales increases in 2021. Hale covered a few other key indicators for growth in 2021:
- 4.1% increase in real gross domestic product (GDP)
- 7% increase in US home sales
- 5.7% growth in US Home prices
- 9% increase in housing starts
Realtor.com® also predicts a strong housing market in 2021 due to pent-up demand from millennial buyers. “We have a huge generation of millennials—nearly 80 million of them,” Hale said. The biggest group of millennials will turn 30 in 2020 and 2021, which is a key homebuying age.
Post-pandemic consumer preferences will drive market activity in 2021
After a year of local shutdowns and social distancing, consumer demands are changing. Hale discussed consumer trends that will drive home sales in 2021.
Top housing markets in 2021 include “secondary tech hubs” and the suburbs
Hale noted that “secondary tech hubs” such as Denver and Seattle are expected to see the greatest growth. “These are secondary scenes where housing is relatively more affordable than the hot tech markets such as San Francisco,” Hale said.
Other “hot” markets include suburbs that are close to urban centers. For example, Harrisburg, Pennsylvania, which is well-positioned to New York City, Baltimore, and Washington D.C., is also expected to see impressive growth.
TOP US HOUSING MARKETS OF 2021
Homebuyers have new demands
Realtor.com® surveyed homeowners to understand how the pandemic impacted their views on their current homes. Their survey found that the features homeowners valued the most were (1) quiet neighborhoods, (2) outdoor space, (3) close proximity to grocery stores and pharmacies, and 4) nice kitchens and appliances for at-home cooking.
Realtor.com® also asked consumers what they would want in a future home. Consumers ranked (1) more space (both indoors and outdoors), (2) more bathrooms, (3) updated kitchens, and (4) more/better technology and smart home features as their top must-haves in a new home. It’s clear that lifestyle changes brought about by the pandemic have shaped homebuyer preferences.
Real estate trends are also hyper-local
In addition to gathering nationwide data and trends, realtor.com® tracks buying and selling activity at a city and zip code level. This information can help real estate professionals advise their clients on the competitiveness in their local housing markets.
For example, Hale pointed to realtor.com®’s “Markets Hotness Index” tool, which tracks days on market data (to quantify supply and how fast it’s moving) alongside unique viewers per listing (to see how well demand is keeping pace with supply). These two data indicators create a “hotness” map so homebuyers and sellers can see how competitive the market is in their zip code.
While national trends are important for a broad understanding of the market, keeping a pulse on city and state-level differences can help businesses set themselves apart and better serve their clients with local expertise.
To listen to Danielle Hale’s presentation from the Future of Real Estate Summit, click below to watch a recording of the session.
