Even the experts were surprised by the growth in the California housing market during 2020. Almost every county had rising real estate values & sales including Sonoma County, Napa, Marin, Monterey, San Mateo and San Francisco. The big question now is: What will the market look like in 2021? Here are some of the facts that drove the market this past year and how they may play out in 2021:
- One of the driving forces this year has been the low interest rates. The good news is that rates will remain low for the foreseeable future.
- Home sales are predicted to grow by 7% in 2021. Some of this increase will be the result of a stronger inventory supply. Homeowners who hesitated to sell this year will feel more confident once the pandemic restrictions are loosened.
- Home prices are projected to appreciate 3-4%. The somewhat slower pace of appreciation compared to 2020 may be the result of a more balanced market. When inventory rises, prices will accelerate at a steadier pace. And with many new homes being in both Northern California and Southern California, you can bet this will be the case.
- Foreclosures should not lead to price declines. The new year 2021 should see some improvement as businesses get back to a more normal condition. Experts don’t expect to see the foreclosure crisis we saw in 2008. According to Lawrence Yun, Chief Economist at NAR:
“Any foreclosure increases will likely be quickly absorbed by the market. It will not lead to any price declines.”
Despite everything that happened this year, the real estate market not only survived but thrived and played a big role in our California economic recovery. The next 12 months are just as promising. Buyer traffic is predicted to stay high and inventory levels are expected to rise.
If you saw your FICO score decline during these past months, or are self employed with difficult to prove income or having some other difficulty with mortgage approval to or refinance property, give Sun Pacific Mortgage a call at 707-523-2099. We offer private money financing on real estate to borrowers who want fast financing or do not qualify for conventional loans at the moment. We may be able to help you, too.