Are we going to experience a housing crash in 2021?
Right now, many people are nervous about the market because they remember what happened during the crash of 2008 and are wondering if we’re headed for something similar this year. However, after 30 years in the industry, I don’t think we’ll see a crash. Here’s why.
First, record-low interest rates are expected to continue through 2021. The Federal Reserve has stated that interest rates will be kept down for the rest of this year, and possibly even through 2022.
Next, our high demand and low supply mean we’ll have a steady stream of buyers in the market for the foreseeable future. Home prices in Snohomish County went up by 11% last year, and much of that had to do with the fact that there simply wasn’t enough inventory to keep up with demand. Many people think new construction should be able to bail us out of this since it has in the past, but I don’t think that will happen either. Builders are having a hard time finding land, getting permits, and dealing with mitigation through the counties.
What about Boeing’s plan to move their 787 plant to South Carolina—won’t that push us into a local recession? Again, I don’t think that will happen. We have many more large employers here in the area than we’ve had in the past—Amazon, Microsoft, Costco, and Starbucks, to name a few. Remember that we’ve been through a recession before without Boeing.
Ultimately, with record-low rates, high demand, low inventory, and a strong economy, we foresee a strong 2021 housing market.
If you have any questions about the market or anything else to do with real estate, don’t hesitate to reach out to us. We’d love to speak with you.
