It’s been quite a year for all of us and I’m sure many are wondering what the new year will bring. The COVID pandemic that began at the start of the year is still with us, but we also have the hope of a new vaccine that will help get lives back to normal soon. Many are wondering what 2021 will bring for the housing market and our Folsom mortgage lender team has the current data and predictions.
Market Update for December 2020
Many areas are still experiencing a seller’s market with growth in home prices trending forward.
In Folsom, home values are current $612K, which is up 7.4% from this time last year. Experts feel we will see a further rise of 8.3% in 2021.
Over in Citrus Heights, the average home value is $380K, which is also up 9.5% from last year and is predicted to rise a further 8.8% in the coming year. In Orangevale, the average home value is $441K, up 9.9% from last year at this time, with experts expecting a further rise of 8.8% into the new year. Rosevale has also seen growth, with home values at $518K, up 7.0% from last year, and is expected to see a rise of 8.0% over the coming year.
Sacramento itself has remained a seller’s market regardless of the pandemic that is ongoing. However, the economy is still working its way back to where it was pre-pandemic, with many people having lost jobs, making it hard for them to be eligible for mortgages. Many sellers have also taken their homes off the market as a covid precaution. With a new Covid vaccination program, we are hoping to see the economy re-open and a rise in the demand for housing as we move into 2021.
With a significant imbalance of supply and demand in housing inventory, it’s very likely that these areas will continue to be hot seller’s markets for some time. Normally, we would see supplies lasting for around 5 to 6 months. At this time, many areas have less than 2 months of inventory, which is why prices have continued to go up. It’s great for sellers because many are getting multiple offers in these hot areas, with some getting more than their asking price. Most homes are pending an average of 11 to 18 days on the market.
Mortgage rates are at their lowest now though, making it a good time for buyers to get back into the housing market in order to take advantage of them. We’re seeing a lot of people looking to move away from coastal and city areas to suburban areas that offer more square footage and greener areas as a result of having to work from home and homeschool. The pandemic also slowed down the general construction of homes, which didn’t help the supply issue. Experts are predicting that interest rates will stay low for the foreseeable future, which can help with affordability problems for buyers.
One thing that could ease the demand of buyers is another wave of the Covid pandemic into the new year. This would ease up on the inventory demand, putting downward pressure on home prices and sales. Buyers would then have more negotiating power. For now, it’s believed inventory will remain low before seeing a gradual rise during the new year.
One area we may see a rise in is home insurance. It seems to be an area people haven’t focused on, but with all of the wildfires the state has seen this year, it’s more than likely that there will be a significant rise in home insurance.
Many have been wondering if there will be a crash in the housing market in 2021, but experts feel this will not happen, looking and the trends and growth we are still seeing. It is also believed that suburban and rural areas will become hot markets in 2021.
If you want to know more about mortgage prices and home prices in Folsom and its surrounding areas, give our Folsom mortgage lender team a call today!