As many folks try to pull their heads out of the fog, out from under a rock or out of their respective posterior the question comes to mind, what is the progression of people when it comes to single family real estate? How will that progression affect the housing market for 2021?
We expect sales to grow 7% and prices to rise another 5.7% on top of 2020’s already high levels. While we expect mortgage rates to tick up gradually, sales and price growth will be propelled by still strong demand, a recovering economy, and still low mortgage rates. High buyer demand and still-lagging supply will keep prices growing, but at a slower pace than 2020 as buyers contend with mortgage rate and price increases that create affordability challenges.
Danielle Hale, realtor.com Chief Economist
For sake of time, lets group the population into generational divides, Baby Boomers, Generation X, Generation Y (Millennials) and Generation Z.
The nearly 75 million Baby Boomers are looking for a home that promotes one level living, room to have a hobby, a community that allows connectivity to friends, family, and experiences as well as a home that promotes air and water quality, comfort and quiet. This sounds great! Nothing like lounging in your overstuffed recliner getting ready to head out to the shop and build quirky bird houses. These types of people are also looking for a “lock and leave” type home that will allow them to migrate to warmer climates as the seasons change, having a direct connection to new builds… which is another blog altogether.
Not far behind sits the cadre of nearly 65 million Generation X, the generation that does not necessarily have a blatant cultural identifier, which is mirrored in trends in real estate. The trend is simple, solid connectivity so work, school and play can all go on, uninterrupted.
Millennials look to be on the move, the postponement of family creation comes to an end, the joy of new babies bouncing around the detached, single-family, suburban sanctum is now the focus. With approximately 72 million humans having the title of “Millennial” it seems that the suburban sprawl will continue. As these families look to relocate to the suburbs it will be up to developers to deliver the list of must haves that this demanding group wants in a home, community, and surrounding area. How does this impact the housing market?
The largest generation in history, Millennials, will continue to drive the housing market as they outnumber Gen X and Baby Boomers. Older Millennials will likely be trade-up buyers, while the larger, younger segment of the generation age into their key home buying years.
Danielle Hale, realtor.com Chief Economist
Generation Z… up to 23 years old this year are looking for a home that is connected, responsive, thoughtfully designed, and attainable. There is a solution that is expected by this generation as they enter the first-time homebuyer realm, will builders, developers and investors step up and deliver options that will be affordable or will this generation be doomed to live in a studio apartment making sure the ramen is not stolen by the crafty pigeon on the stoop. Their role?
Gen Zers will begin to make their presence known in 2021 as they compete with younger Millennials for entry-level homes. The impact of the oldest members of Gen Z on the market will only continue to grow.
Danielle Hale, realtor.com Chief Economist
No matter the age, there is a resounding pull to places that offer a worthwhile and sustainable real estate market that connects work and school through solid internet, allows for people to venture outside without fear of being mauled by a predatory buffalo, and follows through on the loose promise that things are better than previously experienced.
The excitement builds as we approach the upward tendency in supply as the months grow warmer in temperature, adding heat to a real estate market that is already on fire. Stay ahead of the curve in order to make your real estate dreams a reality.
