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What's New in 2021? Main Photo

What's New in 2021?

Posted: December 17, 2020 by Mark Griswold

The question is, “what isn’t new?”

On a personal note, while not completely new for 2021, new enough is that, in October, my family loaded up the Griswold Family Truckster (in this case, a new AWD Honda Pilot that can weather the snowy conditions of our new home) and moved to Coeur d’Alene, Idaho! This meant restarting my real estate career in a city and state where, when we arrived, we could count the number of people we knew on one hand. A challenge, yes, but I do love a challenge! And since we’ve arrived I’ve become active in the community and already made many new friends thanks to the friendly nature that a smaller town brings.

The good news for me; the real estate market in North Idaho is as hot as the one we left in Seattle. The good news for the family; we somehow managed to find the one home on the market that had been sitting long enough (in this case, more than a week), that the seller was willing to take the rare below-asking-price offer and we got the also rare “good deal” in this market when most buyers are having to make offers well above asking. I could go into the reasons why this home sat for so long (two months) while others were “flying off the shelf faster than toilet paper in March” and why, if the seller had done a few small things, it probably would have, but I’ll save that for another article about why a Realtor is worth the investment.

On a real estate market note, again, while not completely new for 2021, the trend that started this past summer is likely to continue. While none of us has a “crystal ball”, nearly all economists, even the typical skeptics, are anticipating continued growth in the market nationwide. What’s fueling this? Three main things:

  • Consumer optimism brought on by the COVID vaccine and overall better than expected economic recovery.
  • “Historically low” interest rates. (The “historically low” interests rates continue to become more and more “historic” with each passing quarter; seriously, the 4% of a few years ago was amazing, the 2.375% interest rate we have (with a 15-year mortgage) is just ridiculous!).
  • Our old friend “supply and demand.” Buyers, many of whom are now able to work from home, can, in many cases, live anywhere in the country. They are leaving urban areas, with their high costs of living, stressful commutes, and, in some cases, increasing crime rates, for the suburbs or even rural or semi-rural areas like our new home, North Idaho, with promises of a lower cost of living, including a lower tax burden in many cases; shorter or no commutes; and housing markets, which, while they’re still “hot, hot, hot!”, offer more bang for the buck with more space both inside and out.

This is definitely a “seller’s market”, which does pose a challenge for buyers and those rare “good deals” are just that, rare, but if you’re at all contemplating a move, there really isn’t a better time.

As I mentioned, economists don’t see an end to this market anytime soon because, unlike the “bubble” of 2008, which was fueled by sub-prime mortgages and a construction boom gone wild, now banks have tightened up their lending requirements significantly and inventory is “historically low”. What’s more, Fed Chairman Jerome Powell recently made an announcement that he doesn’t anticipate raising rates for at least a couple of years. All of this means that, even if you do get into a bidding war and end up paying a little more than the house is probably worth, you’ll see a return on that investment fairly quickly. Plus, you’ll be living where you want to live.

Eventually, of course, the bill for all this stimulus spending and national debt will come due and we will see inflation. And, as is the case in markets over time, this one will return to “normal” before turning into a “buyers” market and probably even a short-term decrease in prices. But, for now, this is the time to buy because, “historically” (yes, I know I’m using that word a lot), there really isn’t any better hedge against inflation and vehicle for wealth building than real estate. Like they say, “they aren’t building any more of it.” (Well, to be fair, they are, as anyone who takes a drive around the town of Post Falls just west of me can see, but they certainly aren’t building it fast enough in areas like North Idaho and many other suburbs and exurbs around the country.)

So, if you think it might be time for a change of scenery, maybe even a change of residence to a state with a lower cost of living and a slower pace of life, give me a call and I’d be happy to tell you more about what’s new in 2021. It might just be your new home!

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