Here it is! We’re going to lay out all of our predictions for the year 2021!
Let’s first deal with the most pertinent question at hand, which is – ‘What appreciation are we going to see for the year 2021?’
Most sources are predicting a significant appreciation for this year, mainly due to the low inventory available and low interest rates. Forbes and KCM are claiming 7% and 6% appreciation respectively. Housingwire is predicting 10%! I’m seeing some of the lowest San Diego inventory levels ever and together with the affordability factory that low interest rates have caused, this will keep us in a strong appreciation driven market. We personally predict around 7-8% of appreciation this year.
So what are the obstacles that could throw off these predictions? Among the top 3 influential factors would the foreclosure market on the horizon, interest rates increasing and an increase in inventory levels.
Factor 1 – The Foreclosure Market
Let’s deal with factor 1. Firstly, the foreclosure market is dead. Banks no longer make the same mistakes they did in 2008 with selling Foreclosures. They are no longer going to sell properties for undermarket values and flood the market with inventory. Also the foreclosure numbers are actually quite low and are nothing to be afraid of especially here in San Diego.
Factor 2 – Interest Rates
Interest Rates could definitely slow down our market. But what greatly outweighs that is our low inventory levels. We’re at the lowest levels we’ve ever seen. As long as these levels continue to be in the same ballpark, or even in the event that they double, we will still continue to see really high demand. Hence, even with increased interest rates prices would at least stay even.
Factor 3 – Increased Inventory
What could cause increased inventory? It’s a known fact that builders here are building 25% less homes yearly compared to 10 years ago. This is because the cost of building increased significantly along with the permitting process and let’s not forget the fact that we are 99% built out here in San Diego county. We simply do not have adequate opportunities to build.
So when considering all the negatives out there in the market, the positives outweigh them at every turn. Hence, I feel we will see a nice steady flow of transactions to follow.
If you’re thinking of making the move, now is a great time. You can now get a premium on your property considering all these factors. But DO NOT just put up your property if it’s not market-ready. You absolutely must fix it up first and have it presentable to get a good price on it. We here at True Local Realty have a great hands-free selling program where we will front you the capital required for repairs, assess the requirements, help with the purchase. We take care of it all! You simply pay us back at the close of escrow and get top-dollar for your property!
Affordability is a huge concern no doubt. The current low interest rates makes everything more affordable! When they finally do go up, everything will again be a bit more expensive.
We hope you enjoyed this article!
If you ever have any questions at all… please reach out to us!
- If you are thinking about buying or selling we would love to help!
- Visit us at TrueLocalRealty.com
- Or give us a call at 888-503-3117