Brian Buffini’s Bold Predictions: 2021 Mid-Year Update
2021 has been a challenging year. While the real estate market remains healthy, there have also been significant shifts, with many agents worried about what the next six months will bring. In my Bold Predictions Mid-Year broadcast, featuring an exclusive interview with NAR’s Dr. Lawrence Yun, I predicted what’s in store for real estate in the second half of 2021 and how you can end the year strong. Here are some of the major takeaways:
The Market Is Hot, but It’s Not a Bubble
The market is hot: houses are selling in record time, prices are increasing and bidding wars are becoming common. Because of all these factors, there’s anxiety about a possible property bubble and crash. However, today’s market is very different to that of 2007 – 2008, when the last bubble happened. Back then, the crash was caused by low down payments, flexible rate mortgages and an oversupply of property. In comparison, today’s homeowners are making substantially higher down payments and conventional mortgages have increased. Meanwhile, tighter lending restrictions and stricter mortgage qualifications mean that people are staying within their means, decreasing the risk of a foreclosure crisis.
Housing stock is still low, with demand outstripping supply. Back in July 2007, there were 4 million homes for sale, while in early 2021, there were only 1.03 million. New construction is starting to increase, although it’s taking longer to complete because of higher material costs, including lumber. Dr. Yun believes there may be an uptick in inventory as older sellers who were cautious about showing their homes during the pandemic put their properties on the market now that Covid-19 cases are dropping and vaccinations are increasing.
With low inventory and increased buyer demand, home prices are still high. Dr. Yun believes there will be no persistent decline in prices anytime soon because of the strength of the market appreciation and the large numbers of homebuyers who have been outbid and who want another opportunity to buy.
According to Dr. Yun, NAR’s membership is now at a record high of over 1.5 million. In such a competitive marketplace, agents need to ensure they are more professional and expertly trained than ever before. Only agents with the sharpest skills will succeed at the highest levels right now. That’s why the Buffini & Company 100 Days to Greatness program, in partnership with NAR, is vital for new agents or those making less than $100,000 a year.
In this kind of competitive environment, agents really need to understand what’s driving the market and where the trends are headed so that they can be prepared for what’s coming next.
If you want to learn more about what the future holds for real estate – and what agents need to do to succeed – listen to the latest episode of “The Brian Buffini Show.”