The year 2020 was going to be one of the hottest years on record for the U.S. economy. That all came to an abrupt halt in March due to Coronavirus Pandemic.
With a national emergency and stay-at-home orders across the country, the U.S. was thrown into a recession. Yet, this was not like any other recession.
Recessions are typically caused by one sector of the economy dramatically turning negative, which pulls down the entire country to negative territory.
This time it was a forced shutdown of the economy to save lives from a once-in-a-lifetime pandemic.
Every economic chart was impacted, from consumption to unemployment to equities, nothing was spared.
The Federal Reserve did everything in their power to mitigate the damage to the economy, and Washington, D.C. provided major relief packages to aid the unemployed and small business owners.
The GDP had its worst quarter over quarter reading in the history of the U.S. during the second quarter, followed by the best quarter over quarter reading during the third quarter.
The economy has dramatically improved, but there is still a long way to go.
It will take a bit more time due to the slow rollout of the recently approved vaccines. The low interest rate environment will continue and will be a tailwind that will not only aid the recovery to the economy, but it will also continue to fuel the incredible run on housing in 2021.
As a result, the local housing market is going to be HOT in 2021. Bottom line, 2021 will continue where the second half of 2020 left off, HOT.
It will be a hot seller’s market from the start of the year through the summer market. Multiple offers and bidding wars will be the norm for home priced below $1.25 million. Once again, the market will heavily favor sellers.
Buyers will have to pack their patience to isolate their piece of the American Dream and take advantage of record low mortgage rates.
From mid-August on, the beginning of the autumn market, housing will evolve into a slight seller’s market, where sellers still get to call more of the shots, but home values do not change as much.
Buyers will be willing to stretch prices from January through July, if sellers do not over-price, but cautiously pricing will be even more important during the second half of the year.