Here’s to you, 2020 – Good Riddance! If you’re like me, you are looking forward to a return to normalcy as we start the new year. We want kids to be back to school, people back at work, some normal social interaction and safe travels. As the pandemic hopefully enters our rear-view mirror, many are asking me what we can expect from the real estate market this year. Despite the pandemic’s ravaging effect on the larger economy last year, the DC area real estate market remained definitively a seller’s market, perhaps even more than it had been in the immediate previous years. Going forward, a few factors seem to merit regular monitoring: Will the economy come back to life? The U.S. gross domestic product (GDP) decreased by approximately 4 percent in 2020. If there is a rebound as hoped this year, that could be good news for continued strength in the real estate market. A big wild card in years to come will be the effect of the sharply higher national debt, currently an unheard of 100+ percent of GDP, on all sectors of the economy.
What will the new Administration’s policies mean for buyers and sellers? I try to steer clear of offering opinions on controversial topics as there is certainly no consensus as to what the new president’s policies will be and how they may affect the real estate market. It seems reasonable to assume, however, that the new Administration will strive to maintain a stable real estate market with an emphasis on affordable housing and fair housing.
Will interest rates remain at record low levels? Earlier this month, Freddie Mac’s weekly Primary Mortgage Market Survey showed interest rates recording their lowest level ever – 2.65 percent. If rates remain this low this year, buyers would retain their substantial buying power, making homes more affordable. Concurrently, there may well be continued competition among buyers, thereby continuing the seller’s market.
2020 and 2021 may well go down as the most unpredictable era for residential real estate. My advice has remained unchanged throughout these challenging times – buyers and sellers should prioritize what makes the most sense for themselves and their families rather than trying to predict what may or may not occur in the future of the real estate market. Should you ever need assistance or have any questions, please don’t hesitate to call upon me!