Laura Schwartz is a licensed Realtor in VA, D.C. and MD with McEnearney Associates in Vienna. You can follow Laura on Instagram at @LauraSchwartzRealtor or her Facebook page. Laura can be reached at 703-283-6120 or [email protected].
As we wrap up the 2020 calendar year and a very strong real estate market, I want to share with you my predictions for how 2021 will go.
What makes me qualified to speak on the market? I’ve been selling real estate full-time since 2008, I have a master’s in applied economics from Hopkins, and I’m one of the top agents in the D.C. metro area according to every poll out there (Washingtonian, Northern Virginia Magazine, The Wall Street Journal America’s Top 100).
Here’s what I know to be true today:
The real estate market for detached homes has literally exploded all over the Northern Virginia area as people try to get more space. Fueled by low inventory and high demand, we naturally enter into a seller’s market, which favors competition, great contract terms and higher prices. In fact, in Fairfax County through Q3, the average house was only on the market for 23 days, which is down 16.5% from last year. The average sales price is up 10.9% from last year. Summary: higher prices, faster sales.
The same can’t be said about the condo market. The condo market is oversaturated with inventory, which is slowing sales and dropping prices. It’s a great time to buy a condo as an investor — except the rental market is also oversaturated and slow. My personal theory is that Covid is ever-present in a condo — wear a mask in the elevator, wear a mask in the hallway, wear a mask just to throw out your trash, etc. There’s nowhere to go and no way to escape it. Would-be buyers and/or renters moved home to mom and dad and took the opportunity to save money. I have no statistical proof of that — just my own theory.
Now how does that position us for a new presidential term, potential post-vaccine world as adults return to the workforce in person?
I expect the real estate market to continue to be strong. I expect sales to continue and inventory to still be low, but I’m hopeful the spring market will be very strong as maybe potential lost sales from 2020 who postponed, actually do sell their homes. I also expect prices to continue to climb.
Interest rates will remain low throughout the year. I had a client lock in a 2.5% interest rate last week. 2.5%! If you have a mortgage with anything over 3.25% right now, you should look into refinancing if you plan to stay for at least a year. With rates remaining low, buyer demand will continue to be strong. Don’t know who to call? Email me for lender referrals.
I expect condos to be slow for Q1 to Q2 in 2021, but I’m hopeful that once the virus is contained more, you’ll see sales start to pick up again.
I do think the demand for detached homes will continue to be the greatest, as it has been for years. But I also see there’s a potential for more work-from-home routines to be established as Covid changes behavior patterns, which changes a buyer’s needs, like the need for a dedicated home office space.
Do I think there will be foreclosures and short sales as a result of all the job loss? Not really. Perhaps in the price ranges under $400K, but even that market is strong, and those who are having trouble affording their homes can still sell at a profit and avoid the financial hit.