2021 Real Estate Market Predictions for Orange County, CA

Posted on October 28, 2020. Filed under: First Time Buyer help, Home Seller Tips, Informed Investor Alliance, Orange County Real Estate, Selling your home fast |

Today one of our favorite forecasters, Steven Thomas, gave his thoughts on closing out the crazy 2020 Covid real estate market and what we expect to see here in 2021. If you love stats, be sure to subscribe to our email list, as we send out Reports on Housing statistics monthly. These reports will keep you on top of exactly what is happening right now with property prices, average days on market, and demand.

More space or a home office are very common reasons to move in 2020, which will also likely roll over into our 2021 season.

We’ve had a really interesting year in real estate, almost flipped from our normal Orange County trends. We were slower in the spring, obviously due to quarantine and virus setbacks (coined ‘The Pandession’). Then we heated up in summer and are still going strong here in fall, when things usually cool.

The pandemic really made people think about what they wanted in a home. And now, they are going out to get it. Sometimes it’s a larger yard, other times a pool, being closer to loved ones, or relocating to a rural environment. Change is brewing in all levels of our housing market.

2020 has seen a SURGE in Luxury demand and sales, and we are seeing it in our team deals as well. Here’s a visual for a better picture:

Demand far outweighs supply, so almost every listing is selling with multiple offers at this point in time. Will it continue? Read on…

One of the factors that will affect our market significantly is Coronavirus numbers and which way they are swinging. If we end up in quarantine again, it WILL affect all markets, including housing, so keep that wild card in mind as we enter into 2021.

Foreclosure Predictions for 2021

Should you be worried about foreclosures? Waiting for that screaming deal on one??? Not really. Less than 6% of homeowners are on forbearance or late on their mortgage. That’s not enough to create a ‘foreclosure wave’…even if ALL of them get foreclosed on. This chart helps to tell part of the story. In 2006, owners didn’t have much equity. In 2020, owners have a LOT of equity.

Due to this equity, the forbearance options, and the rates driving buyers, Steven does NOT expect any wave of foreclosures in 2021.

What about the Rental Moratorium?

Approximately 20% of renters are late on their rent. At first that number seems like WOW…but…rewind to Oct 2019… and the tardy-on-rent number was ALSO…20%. So landlords aren’t hurt that bad, even though renters are on a break until Jan 31st 2021 with the rental moratorium here in the state of California.

Will Housing Demand Stay High in 2021?

Demand is strongest it’s been since Sept 2012 – eight years. If you think we’ve been busy hustling homes, this year is even busier. Demand is expected to slightly drop during the holiday season for November and December, but it will still be higher than the last 8 years. If you have a home to sell before Dec 31st – get in touch – it’s totally a possibility!

Inventory is the lowest it’s been since 2013 – pushing the average days on the market in OC to under 40. A hot seller’s market is under 60 average DOM….so we are in a hot HOT seller’s market, which not even the election division is extinguishing.

Should I buy a home in OC before 2021?

Short answer: Yes. Interest rates are LOW. Demand is high. Prices continue to go up. Lucky for our buyers, even with these prices.. the payment is more affordable than it would have been a few years ago. Check out this comparison:

Interest rates drive affordability. Right now your payment is SO affordable. If you can qualify to buy, it is a fabulous time to make a purchase. In Steven’s words…’You’ll be kicking yourself if you don’t’ LOL. We know, you don’t have the down payment saved. But let’s have a conversation with a parent or grandparent who has equity, or get you crowdfunding your down payment with Vow2Save.

2021 Forecast according to Reports on Housing

Uncertainty with Covid, vaccines, Washington DC, travel, and employment can all make things sticky. If we continue to experience the same demand, things can get sticky.

  • Prediction: Real estate will enter 2021 strong and remain that way for at least half the year.
  • Prediction: Appreciation 4-7%. Prices are NOT expected to go down at all in 2021
  • Prediction: Upper ranges will continue to rise
  • Prediction: Closed sales should double what they were in 2020. (from 4 to 8%)

Want to stay up to date on the Orange County real estate market? Simply fill out the form below and we’ll start sending you Steven’s Reports on Housing via email!

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    Orange County, CA Real Estate for hip first-time buyers and investors. Plus, fun things to know and do in OC.

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