The year 2020 was a quixotic one: Real estate flourished, the stock market boomed, social divisions cracked wide open, and people around us died from an out-of-control global infection. Covid-19 changed the trajectory of everything that any of us could have possibly imagined. As a result, many of our top 10 predictions for 2020 were wrong, but we don’t give up easily. Here are our top 10 for 2021:
1. The International Outer Space Treaty of 1967 will be amended so people can acquire land on the Moon and Mars.
2. Interest rates will remain depressed, keeping the housing market hot through the remainder of next year. Consequently, publicly-traded real estate company valuations will continue to rise, creating more real estate billionaires.
3. The day-old question “where do I live” will enter a new dimension this coming year. The freedom to work anywhere will dissolve state, regional and global boundaries as we knew them, undoing centuries of rigid home to work patterns. Community identities, family connections, and transportation networks will be reshaped.
4. Florida, Texas, and Nevada will be the biggest beneficiaries of the great geographic reshuffling. People are seeking lower-cost areas with no state income taxes and locations where in some cases their like-minded political tribes live. Regional economic power centers like New York and California will lose their clout to a distributed workforce and to low-tax states.
5. As public and private debt grow, inflation will raise its ugly head. It will add fever to the housing market as houses offer a cost-of-living hedge. But higher prices for goods and services will put a pinch on consumer budgets and housing affordability will worsen.
6. HUD will be pushed to increase the penalties for Federal Fair Housing violations. Currently, they stand at $21,400 for the first incident and $53,524 for the next transgression that occurs within five years of the first violation. They have adjusted annually for inflation but deserve an overall reexamination.
7. “Coming soon” listings will become a relic of the last decade. Transparency, open markets, and full disclosure will win in the end.
8. Nursing homes will die. Post pandemic, the senior housing market will undergo a radical transformation as congregate care goes out of style. Seniors will find alternatives including staying put, as new technologies facilitate safer and better in-home care.
9. Insurance premiums will spike because of a proliferation of climate disasters. The National Association of Realtors will get behind a federal effort to protect consumers from price gouging. Homebuyers will become more risk-averse about where and what they buy. They will begin to expect their agents to have answers about the local impacts of climate change.
10. Real estate industry lawsuits will proliferate and some will be resolved with staggering financial settlements. The litigation will spawn a new age of consumer transparency when the public gets access to all of the local MLS data fields. The DOJ will not retreat from its legal fight with NAR, though the Biden Administration may be more conciliatory because of the powerful trade groups’ political influence.
Interesting information in challenging times. Contact me if you would like to talk it through.