Marin County Real Estate Blog

3 Reasons to Be Optimistic about Real Estate in 2021

3 Reasons to Be Optimistic
about Real Estate in 2021 | MyKCM

This year will be remembered for many reasons, and optimism is one thing that's been in short supply since the spring. We're experiencing a global pandemic, social unrest, an economic downturn, and natural disasters, just to name a few. The challenges brought on by the health crisis have also forced many homeowners to reevaluate their space and what they need in a home going into 2021. So, experts are forecasting that next year is one in which we can be optimistic about real estate for three key reasons.

1. The Economy Is Expected to Continue Improving

Tim Duy from the University of Oregon puts it this way:

There is nothing fundamentally ‘broken' in the economy that needs to heal…there was no obvious financial bubble driving excessive activity in any one economic sector when the pandemic hit…With Covid-19 cases surging again, it is understandably hard to look optimistically to the other side of this winter…Don't let the near-term challenges distract from the economic stage being set for next four years.

2. Interest Rates Are Projected to Stay Low

In the latest projections from Freddie Mac, interest rates for a 30-year fixed-rate mortgage are expected to remain at or near 3% next year. These low rates will continue to make homes more affordable, driving demand for housing...

With Home Values Surging, Is it Still Affordable to Buy Right Now?

Housing inventory is at an all-time low. Realtor.com just reported that there are 39% fewer homes for sale today than there were last year. At the same time, buyer demand remains strong. In a recent newsletter, research analyst Ivy Zelman explained:

Although the headwind of severe supply constraints in most markets has contributed to slight moderation in seasonally-adjusted and year-over-year new pending contract growth for two consecutive months (albeit still growing strongly), the underlying strength of buyer demand, particularly for this time of year, remains apparent.

Whenever there's a shortage in the supply of an item that's in high demand, the price of that item increases. That's exactly what's happening in the real estate market right now. As a result, home values are surging.

This is great news if you're planning to sell your house. On the other hand, as either a first-time or repeat buyer, this may instead seem like troubling news. Purchasers, however, should realize that the price of a house is not as important as the monthly cost. Here's how it breaks down.

There are several factors that influence the cost of a home. Two of the major ones are:

  1. The price of the home
  2. The mortgage rate at which a buyer can borrow the funds necessary to purchase the home

How do these factors impact affordability?

The National Association of Realtors (NAR) produces...

Current Homes for Sale
Southern Marin
City # Price Range
Belvedere 13 $2.8m - $23.5m
Mill Valley 40 $895k - $12.5m
Sausalito 8 $490k - $4.0m
Tiburon 25 $915k - $17.8m
Central & North Marin
City # Price Range
Corte Madera 6 $655k - $2.4m
Fairfax 7 $795k - $3.5m
Greenbrae 9 $629k - $2.4m
Kentfield 6 $1.6m - $18.0m
Larkspur 2 $475k - $2.0m
Novato 39 $110k - $4.5m
Ross 3 $2.9m - $7.3m
San Anselmo 14 $725k - $7.0m
San Rafael 69 $95k - $6.2m
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