The world has been turned upside down in recent months due to the COVID-19 pandemic. Markets have entered uncharted waters of volatility, setting records for both gains and losses just weeks, sometimes, days apart. Every industry is holding its collective breath to see what future paths will take shape. The real estate market is no different. Steve Kemler, a respected, entrepreneurial business leader with successful ventures in healthcare, education and real estate offers his insights into what the housing market may look like in 2021.
Steve is first to admit that the normal projection process of analyzing historical data with current indicators and overall market movement is strained due to COVID-19’s chokehold on the global economy. There are many “the sky is falling” housing market reports to keep nerves on edge and dark clouds hovering. However, studying economic landscapes and leading housing indicators can still provide some insights.
The silver lining in Steve’s opinion is that the current unpredictability in our economy – especially in the housing market – should stabilize once a clear, safe and visible way forward is defined. It is important not to compare the today’s decline with the housing bubble collapse of 2007/08. Steve points out that these are extremely different circumstances that will correct in very different ways. Furthermore, Steve acknowledges that the tremendous federal fiscal and monetary stimulus efforts to fight the economic pandemic may springboard the housing market back to its strong, pre-COVID-19 position by 2021.
Additionally, Steve projects there could be potential upsides on the other side of COVID-19. Along with lower interest rates, work-from-home will likely remain a permanent work model for many Americans. Buyers and sellers will be looking at housing a bit differently. Home office’s and gyms may become a higher-valued asset for new buyers. Increased distance from city and corporate centers may become more valued. Families will be looking at their next home purchase as more than the space where family life happens. Instead, they will be looking through the lens of needing a space for the home, school and work all under one roof. Real estate marketing will adjust to the new needs of buyers and sellers by highlighting homes with these new features, and new normal, in mind.
As of today, it is difficult to project where the housing market will be entering 2021, but Steve has confidence that however thing develop, as we learn to live in this new reality, there will be momentum and a rebound toward progress. The new normal may offer a perspective we never knew we were missing.