I really think 2021 will be great! Here is my real estate forecast!
Of course, 2020 set a pretty low bar, but I believe that 2021 will be a great year even without measuring it against the sh**-show that was 2020. Let’s recap.
Restaurants, airlines, personal service providers and many others were hit hard during the pandemic. One of the bright stars remained the real estate industry, which was, early on, designated as an essential service. The reason for this move is easy to explain and defend:
A single real estate transactions has, on average, been credited with $40,000 worth of economic spinoff activity: taxes, realty fees and legal fees, moving and insurance costs, furniture and renovation costs and more. On top of that, real estate transactions can be done in a safe manner. Aside from Open Houses (which have largely been curtailed) buying or selling a property does not involve crowds and can be policed and controlled.
After speaking with several real estate agents in North America, I found that they also witnessed the same phenomenon we did here in Winnipeg. A surge of buyers, looking to find a home in an ever-shrinking list of inventory. It seems that buyers were there but sellers were hesitant to list their homes. The result was that while driving prices up (thru bidding wars) homes also stood a better than normal chance of selling. Take a look at this table:
This is a list of detached houses, listed between $300K and $350K, showing the percentage success rate of sale. So if a seller listed their home in Winnipeg between $300 and $350K, they had a better than 87% chance at a successful sale, or 5 in 6.
Throughout 2020, the numbers of available listings have consistently been down when compared to last year. Today, (Dec 29th 2020) there are 536 homes on the market in Winnipeg. This compares to over 1400 on Dec 15th last year. (I can’t wait to see the number once a bunch of home listings expire on Dec 31st, stay tuned for the monthly update which will come on Jan 3rd at magazine.winnipeghomefinder.com).
The amazing thing (to me, at least) is that with all the talk of unemployment, businesses closing and industries undergoing pandemic restructuring and hardships, the buyer activity remains as high as it did. I can only imagine what will happen when the overall economic conditions improve.
What is the real estate forecast for 2021?
In my humble opinion, I think 2021 will be a bright one, all around. We can see a light at the end of the pandemic tunnel, with 2 vaccines already in production, a 3rd one getting close and another one (Johnson & Johnson) rumoured to be in the works.
Interest rates are expected to remain low well beyond 2021, which is the main driver of the buyer enthusiasm. Couple that with (what I believe will be) higher listing activity, and we should have a very good year for selling and buying a home in our city.
In the near term, I believe that the first homes to be listed around Feb/March will see incredible buyer activity. By that time, buyers will be itching to get going again. Many of these buyers had been unsuccessful in 2020, unable to compete in bidding wars. So if you’re looking to sell, being early to market might not be a bad idea. Get your home ready now by decluttering (you can donate a lot of the gently used stuff to D’Arcy’s Animal Rescue Centre, their new thrift store ‘Annie’s Attic’ will be open soon at 1560 Main St.)
Fix anything you need to repair, such as worn out carpets, scuffed or worn paint etc. And call your favourite REALTOR for a pre-list examination and some final tips.
My real estate forecast is: I think 2021 is gonna be wild…..in a good way.
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