Good riddance 2020!
As we ease into what will hopefully be a far better year for all of us, we notice that questions about what to expect from the 2021 Tahoe-Truckee housing market are increasing.
As in everything else we’ve experienced of late, there’s no simple answer to what the “new normal” real estate market will look like.
We like to get an overview of both the national and local economies before offering up our best guestimate. We also enjoy reading the various predictions doled out by economists near the end of one year and the beginning of the next.
In a nutshell, there are three forces currently at work in the real estate market:
- Strong demand for homes
- Not enough homes for sale
- Low-interest rates
Will these remain in 2021? Here’s what the research is saying:
Demand for homes
Demand is driven by affordability and with interest rates remaining low into the new year, strong demand from Tahoe-Truckee home buyers will most likely continue.
The unknown in the equation is whether and by how much home prices will rise in response to the strong demand.
Wrapping up 2020 for the Tahoe-Truckee real estate market, we saw home pricing increase by 25% year over year – a huge jump, but to be expected given the extremely low inventory and high demand.
Our finger is firmly on the pulse of the Tahoe market and our prediction is that home prices will continue to grow due to the tight inventory of homes for sale – and will continue well into 2021.
Not enough homes for sale
Every month, the gap between the number of homes sold and the number of new listings widens. Unless more homeowners decide to sell, the available housing inventory in Tahoe will, of course, remain low.
For example, when compared to 2019, 2020 saw a 33% increase in residential transactions and a 79% increase in total dollar volume for those sales in Tahoe (2020 Year-End Tahoe-Truckee Market Report).
It may sound trite, but now truly is the best time to sell your Tahoe home.
Low interest rates
Will mortgage interest rates remain low? There isn’t a lot of agreement from the experts.
“Rates are going to stay low. Demand is going to stay high. And under the new leadership, there are tax credits for first-time homebuyers, as well as tax incentives for those moving to keep their current home’s property tax rate in-tact,” according to Ephraim Schwartz, Partner at O’Dette Mortgage Group in Tahoe City.
While rates have remained low, the forecast does predict they will slowly start to go up toward the last half of 2021 – and although a small rate hike the potential to price out some buyers might be on the horizon.
From our research we’ve gathered that the forecasts estimate the 30-year, fixed mortgage rate will likely be 3% – with forecasts ranging from 2.8% to 3.3%.
Getting ready to sell
As you can see, and as is typical, there is not a broad agreement on what we can expect from the real estate market in 2021.
Even if you’re merely considering selling your home, start getting it ready for the market. Do some basic repairs, start de-cluttering and storing items that you don’t routinely use. Consider painting the interior.
We’re happy to give you some tips on where to start, at no cost or obligation to use our services. Feel free to reach out to us. We’re always happy to help.