The 2021 outlook
What will the real estate market look like this year? Even the expert economists at the Texas Real Estate Research Center said that “unprecedented unknowns” made forecasting the year difficult.
“The economy could look different coming out of the pandemic as some changes become permanent,” economist Luis Torres said in a recent explainer. “Because this recession was caused by a health catastrophe, the recovery path could be different than that of previous recessions. Consumer and business safety expectations will play an important role in the economy’s full reopening.”
But the center’s outlook does call for strong demand, low inventories, and solid price growth – so more of the same. Thanks to the Federal Reserve, inflation is expected to be low, and the economy will grow slowly, which will probably keep mortgage rates low.
“According to the Mortgage Bankers Association, 2.7 million homeowners (5.5 percent of all home loans) were in forbearance as of Dec. 13, 2020,” said Torres. “The share of homeowners who will be able to make their mortgage payments once forbearance ends is unknown, but we expect delinquencies and foreclosures, which have so far been kept low by government policy, to increase during the year.”
Dallas agents make bank
Dallas is a hot real estate market, but how well does it pay? According to researchers at the Inspection Support Network, out of all large U.S. metros, Dallas is the third-best paying for real estate agents.
Based on data from the U.S. Bureau of Labor Statistics and U.S. Bureau of Economic Analysis, the company’s report showed that the median wage for Dallas metro real estate agents was $70,884, almost $30,000 more than the average median wage for all workers in the area. The concentration of real estate agents in the area is nearly 30%.
Consumers losing confidence
As the pandemic continues, consumers may be losing confidence in the housing market, the most recent Fannie May Home Purchase Sentiment Index revealed.
The index dropped six points between November and December – the lowest level since May 2020.
The number of Americans who think it’s time to buy a home fell by five percent to 52%, while the number thinking it’s not a good idea rose four percentage points to 39%. For comparison’s sake, a year ago, nearly 75% of Americans thought it was a good time to buy.
“In particular, the sell-side component fell for the first time since April and by 18 points, reversing most of the increases of the past three months and implying to us that, at least temporarily, potential home sellers might wait to list their homes,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “If so, this could have the effect of perpetuating already-tight inventory levels and supporting additional (albeit lesser) home price growth, which could contribute to a further moderating of home sales.”
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