Housing Market Forecast: Predictions for 2021 | Luxury Realtor Cristal Clarke

HOME SALES, NEW CONSTRUCTION AND HOMEOWNERSHIP TO REACH RECORD HIGHS

Extraordinary Modernist Masterpiece for saleto illustrate real estate predictions for 2021

There’s a lot to be optimistic about when it comes to the 2021 housing market forecast and predictions from the experts. Home sales, new construction and homeownership are expected to climb to record highs as mortgage rates remain historically low. That growth is in spite of the 2020 global pandemic. And while most of us are happy the year 2020 is coming to an end, experts predict the soaring home prices that became a hallmark of the COVID-19 crisis may be here to stay.

READ: Santa Barbara Housing Market: Home Prices in the Shadow of COVID-19

Demand Continues
Even though the pace of the wild price growth we saw in 2020 is expected to slow, Realtor.com®'s 2021 housing forecast reports that record-high prices will continue climbing in 2021. Nationally, sales of existing homes are projected to increase 7%. Meantime, the California median home price is forecast to edge up 3%.

Homes like the Extraordinary Modernist Masterpiece pictured above will take center stage. Built in 2012, this modernist masterpiece offers unmatched privacy, tranquility and convenience, while showcasing surreal panoramic ocean, coastline, Channel Island and mountain views from nearly every room. Watch for even more extraordinary properties like this one coming online, especially during the second half of next year when inventory is expected to climb.

Bright Spot for Homebuyers
Experts believe that our current positive outlook for homeownership could be called the silver lining of COVID-19. Due to the pandemic, families who were stuck inside their homes for months on end realized they needed more space or wanted homes with features they didn’t know they needed. The stay-at-home orders resulted in more interest in living in suburban and rural areas than in the cities. That alone caused sales in places like Santa Barbara to soar.

READ: Buying a Santa Barbara Home During a Pandemic

Mortgage rates, which are currently at an all-time low of around just 2.72% for 30-year fixed-rate loans, are expected to reach 3.4% by the end of next year. That’s still very, very low. But the bright spot in the housing market forecast for buyers is that more homes are likely to become available in the last six months of 2021. That inventory will create more options to choose from for buyers.

With a larger selection, buyers may not be forced to make a decision on one of the biggest purchases they’ll ever make in mere hours giving them more time to make up their minds. But don’t wait too long if you’re moving in California. Montecito, for example, has seen exceptionally strong sales volumes in 2020 as the urban flight into our local communities continues. This, combined with increased buyer activity from local homeowners, is expected to continue throughout 2021.

New Construction
The housing market forecast also predicts more new homes will be built in 2021 than in any year since 2006. Experts say this is also due to the historically low interest rates. Those historic rates allowed builders to finance their projects at lower costs. New construction has already picked up since the pandemic began, and building permits increased 21% from September to November compared to the same period last year. In fact, it is predicted that single-family housing starts, which are homes that have begun construction but aren't yet completed, will rise 9%. And it's sorely needed as there is an estimated shortfall of almost 4 million new homes heading into the new year.

READ: Wellness Living and Wellness Real Estate: The Next Trillion-Dollar Trend?

The new construction, while often more expensive than existing homes, is likely to appeal to move-up buyers looking for larger abodes with the latest amenities. Once those homebuyers purchase these brand-new homes, they typically list their existing property; adding more inventory to the market. And in Santa Barbara, I’m your agent to both buy and sell, which makes both transactions easier.

Open floor plan great room with large floor to ceiling windows

The Rise of the Millennials
The largest generation in history, millennials will continue to shape the housing market forecast as they become an even larger player. The oldest millennials will turn 40 in 2021 while the younger end of the generation will turn 25. No longer just dominating the entry-level of the real estate market, older millennials who are expanding their families are now taking over as move-up buyers with the realization that they need more space. My 7,188 sq. ft

Romero Canyon Road listing is a good choice for those looking to expand since it offers 5 bedrooms and 4.4 baths and sits on 5.51 acres. Not to mention, the home is absolutely spectacular, replete with an extensive list of indoor and outdoor amenities.

Lessons of 2020
If 2020 has taught us anything, it's that everything can change in an instant. If the nation undergoes additional lockdowns due to COVID-19, then fewer homes may go up for sale and the market could slow. If everything goes well with the vaccines being rolled right now, then the housing market could benefit from additional inventory and sales. Let’s pray for the latter to be true. Also, keep an eye on the economy. If it doesn't improve, it could put a dent in the market.

Perhaps this information on the housing market forecast has inspired you to list your property now in Montecito, Hope Ranch or any of Santa Barbara’s upscale communities. I don’t blame you. This is an excellent time to sell as well as to buy. Contact me at (805) 886-9378 or email me at Cristal@montecito-estate.com and let’s discuss how you and your family can benefit during the 2021 housing market.

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Client Reviews

“Cristal Clarke has conducted numerous real estate transactions for me beginning 13 years ago with the purchase of a Lemon Ranch. She has handled both large and small purchases and sales with equal dedication. As a negotiator, you can’t find anyone better. Her transactions are always conducted in the most appropriate and professional manner. Cristal has considerable knowledge of the Santa Barbara market.”

- S.N. Decker Ph.D.

“Living in Europe, we were to say the least, unaccustomed to the nuances of Real Estate acquisition in California and Cristal steered us through the process with absolute professionalism and personal attention to detail at every turn. Her in-depth knowledge of the market place combined with enthusiasm and drive was the only reason we secured the property of our dreams and will be forever grateful. If you are looking for personal discrete and private representation of the highest quality we suggest you look no further than Cristal Clarke.”

- Johan and Paula van den Berg

“Cristal is very straightforward, cheerful, helpful, professional and trustworthy….we felt very lucky to work with her.”

- John and Lacey Williams

“After considering our many choices, we are grateful it was Cristal Clarke of Sotheby’s International who represented the sale of our Montecito cottage. We are familiar with Cristal’s reputation of hard work and dedication to clients, but it was her attention to detail that made our experience so positive. She offered suggestions for staging the property, worked in harmony with potential buyers and was even able to secure back up offers. The sale of our cottage was completed much sooner than we expected, due in great part to Cristal’s professional skills and support. We highly recommend Cristal as a first choice for anyone needing representation with real estate.”

- Michael & Nancy Lee

“Our experience in working with Cristal Clarke resulted in the successful and discrete acquisition of a property which was not yet on the open market. Her knowledge of the Montecito/Santa Barbara area and vast expertise blended with her passion for real estate and architecture, provided us with the very highest level of professionalism and personalized services. Cristal exhibited a rare combination of excellent communications, attention to detail, creativity and patience.”

- Richard and Catherine Frinier

“Cristal really breaks the mold. She knows every nook and cranny of this real estate market, understands value, and follows up on everything, all the time. She was incredibly patient with our two year quest to find the perfect house. Every house hunting trip from across the country was well planned, and our time was never wasted. On top of her professionalism and expertise, she is delightful to spend time with. We are thrilled with the home we purchased, and grateful to Cristal for so wisely advising us through this process, right through to the close and beyond.”

- Laurie Siegel

“We met Cristal first in the course of renting a winter home (for three years), then buying a house using her as our agent. She was amazingly good at listening to our wants and showing us homes that fit our needs. Her mastery of the paperwork was perfect. Most importantly, there was never a situation where we doubted her straightforwardness or integrity. If we do another real estate transaction in Montecito (which I doubt, we’re happy with what we purchased), without question we’d use Cristal again.”

- Ken Saffir

“Susan and I just want to thank you for your efforts in the sale of our home. You are really quite amazing. Your competence, persistence, optimism and humor made the entire process effortless. Every problem that arose, you somehow fixed; any obstacle, you overcame. We have bought and sold many homes. It has never been such a painless and enjoyable process!”

- Michael & Susan Marquart

“A little something about “our” realtor, Cristal Clarke. My wife and I came to Santa Barbara about fifteen years ago looking for a seasonal home from which to enjoy the weather and amenities of the central coast. Being in the real estate business myself I was familiar with agents and brokers so entered the market with open eyes. We “flipped” a few houses in the early years, dealing with various agents and finally ended up in Montecito. That’s when good fortune put us together with Cristal. To say we were impressed is to put it mildly. Cristal really knows the market. She is familiar with the area, its history and trends. When we have questions about a particular property she either has the answers immediately or gets back to us by phone or email. There is no waiting or wondering with Cristal. She is an agent who is “on top of it.” Her recommendations as to price points, contractors, inspectors and title agents have proven to be exceptional, showing great insight and the highest professional standards. We consider ourselves exceedingly fortunate to say that Cristal Clarke is our realtor and would recommend her services to any serious buyer or seller.”

- Rob & Judi Kelch