One of the questions I get asked the most is what I think the real estate market will do in 2021. We are in a state of uncertainty because of the COVID-19 pandemic. I’m sure many buyers and sellers are sitting on the sideline, wary of making a move, in fear of what the market may do. While these apprehensions are justified, there is nobody on the face of the earth that can tell us what the market will do. We can use trends, signals and facts to form a prediction, but it’s nothing more then a prediction and a prediction is no better than an opinion. So I would like to preface this blog and say that this is purely speculative, and just my opinion. Without further ado, lets begin.

Expert economists can all agree that this year is probably the most difficult to predict in recent memory. Forecasts of the market are all over the map. As a result, I have an optimistic prediction and a pessimistic prediction. As usual, I will choose to be optimistic, but it’s always smart to be prepared for any situation.

Optimistic

The real estate market in 2021 will continue to climb or remain steady. The Bank of Canada has committed to keeping interest rates low into 2023. While they might not stay at the record lows we have seen, I don't expect them to fluctuate too much in 2021. The low rates coupled with low inventory result in a hot market driving up the average sale price. I expect we will see inventory numbers bounce back this year as many homeowners who waited out 2020 will be ready to sell this year.

Pessimistic 

The real estate market in 2021 will see a gradual decline. There are a couple of scenarios that could support this negative outlook. Firstly, we could see a supply shock as many of the mortgage deferral programs will come to a close. This could result in an increased number of foreclosures for families. The second reality we could face is simply returning to normal life. I don't expect this would happen until later in the year but as the vaccines roll out and we see life returning to normal, we could see the market drop to the averages we had seen in 2019, prior to the spikes (up + down) we saw as a result of the pandemic.

In either circumstance that we see in 2021, I strongly believe that everything will be fine. A healthy market sees increases and decreases and that is just part of the economy. If you are thinking about buying or selling but aren’t sure if 2021 is the right time, I would encourage you to reach out to me. I will give you authentic and unbiased advice based on your situation. Thanks for reading everyone.

 

Daylyn