End of Year Market Update for USA; Canada, UK
It has been quite a turn of events within the past few months for the real estate market, despite the pandemic. At the beginning of 2020, we saw many sellers taking their homes off the market in fear of the unknown and unpredictability. Then during the summer, we began seeing something extraordinary happen: home sales suddenly surpassing pre-Covid levels and rising. We now see homes being put on the market and quickly receiving multiple offers then closed on within short periods of time.
A very different market than what we saw even a year ago, the housing market appears to be well past the recovery phase and now showing the demand, supply, pricing, and sales are reaching new heights. Demand is at an all-time high, and supply at an all-time low, which has skyrocketed pricing, leaving us numbers the U.S. has not seen since 2004. The Mortgage Bankers Association reported that the fixed 30-year mortgage had slid to a staggering 2.9%, historically an all-time low. (Just a reminder, this time last year, the rate was at a whopping 4%!)
United States - Property Market Predictions for 2021
Record-high prices will continue rising in 2021, delivering a blow to first-time buyers.
Prices are expected to jump next year as a result of more properties projected to hit the market.
More homes are likely to become available in the last six months of 2021.
Canada’s Housing Market also appears to be on the rise with “move-over” buyers from other cities continuing to spark market activity and high demand. All major markets posted strong increases. New listings increased by 2.9% from September and up nearly 16% from October 2019! Low interest rates are keeping the market’s wheels turning giving an opportunity to first time home buyers and move up buyers a chance to jump into the game. With many Canadians now working from home demand in the suburb areas and smaller markets are at an all-time high, ultimately driving sales up.
Who would have guessed the pandemic would set the stage for record-high activity? Depending on how work-from-home trends, interest rates, and mortgage payment deferrals go, the market could really go either way come 2021.
Canada - Property Market Predictions For 2021
Economists predict employment disruptions may negatively impact the Canadian housing market.
Demand-supply conditions will maintain strong upward pressure on prices.
The pace of home resales across Canada will slow down.
In the UK, numbers have been on the rise. With the government temporarily cutting stamp duty, an increase in new buyers for a fifth month and an increase in new home listings has become prominent.
It’s the fastest rate in more than four years! However, the stamp duty cut appears to have put a strain on the market as it has increased demand drastically. Consumers across the country are using their extra cash from the tax break to BUY BUY BUY.
With such demand, it is now taking weeks for mortgage evaluations and legal work to be dealt with causing a major halt in progression and sales.
Many project the market will dampen next year once the hefty tax cut is withdrawn and the influx of unemployment hits.
Property Market Predictions For 2021
Halifax says the housing market will eventually feel the effects of the economic downturn.
Fears rise once Government support is withdrawn, housing market will regress.
The Centre for Economics and Business Research predicts house prices could fall by 14% in 2021.