Massachusetts Housing Market Predictions For 2021

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The realities of 2020 vs. the realities of the real estate market are stark. While this year has been uncharacteristically terrible economically, the housing market has witnessed a boom due to accelerated demand and housing scarcity.  And despite the gradual slowdown in the housing market in early spring, it remained a bright spot in an otherwise tense economy.

The Massachusetts Real Estate Market is rising

after the dust settles on the 2020 housing industry, the National Association of Realtors estimates that American home prices will rise by 6 percent over 2019, and sales will rise 3 percent.

According to The Warren Group, the median price of a single-family house in Massachusetts has risen even faster — 11.3 percent year to date through November, to $455,000 — while sales in the state only went up 1.5 percent compared to last year.

In one way, the path out of the pain of the COVID-19 pandemic seems excitingly close, and yet it is still months away, with vaccine distribution ramping up. How will that trudge towards normality affect buyers and sellers in 2021?

Redfin is predicting another big year for the housing market. This is due to a decline in interest rates makes, which makes a house more affordable. The economy will recover, and the virus will be under control, and people who delayed selling will be ready to sell.

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The other reason for forecasting ongoing housing price growth in 2021 is low fixed mortgage rates. Most economists expect 30-year fixed rates to average just over 3 percent. As those who have shopped for a home recently will have heard: There are just too many houses unavailable.

Realtor.com predicts that the housing market will continue its expansion next year, with home prices increasing by 5.7 percent on a national and local level in 2021.

They also predict sales volumes to increase by 7 percent nationwide and by 5 percent in Boston. Additionally, buying seasons will return to their normal patterns, spring and summer being strong and fall and winter slow.

Cultural Forces Impact Massachusetts Real Estate

However, despite all of this, the home buyer demand still won’t be sated, with the largest generation in history currently at the point in their life to buy their first home.

This almost ensures the trend that it will be a seller’s market for a long time to come due to lack of inventory.

Additionally, the migration to work at home culture,  may result in a demand for larger houses with more space for offices, or the very least, a secluded place to get work done.

With millennials forming new families and their flexibility in joining the workforce, urban migration appears likely to continue in 2021 away from costly city centers and toward lower-cost suburbs and rural environments.

Traditionally, people wanted the shortest commute to their office from their home.

However, the remote work trend probably won’t slow down, as companies start to realize the cost-saving benefits of a work from home environment.

This reduces the time a worker will have to go to the office, making individuals more tolerant of a longer commute if they can have more features on their house or lower costs.

However, agents say it’s essential for buyers to prepare for a competitive market, which is expected to happen in 2021.

That means researching home values, visiting what’s available, collaborating with a Massachusetts realtor, and getting preapproved for a loan so you can pounce quickly.

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