In November, Zillow busted out of the pack of prognosticators and predicted around 7% appreciation for NSDCC zip codes over the next 12 months. They have revised again – now predicting that our North San Diego County coastal areas will appreciate at least 10%:
Where will they be next month?
It doesn’t really matter how they got to these predictions, or if they are realistic. They are broadcasting these to the masses, and with their reach, their forecasts alone can influence the market!
The online home sale marketing company expects 2021 will be a year unlike any other as the housing market responds to the challenges and changing preferences that emerged in 2020. Zillow expects demand to remain high and to surge in cities as economies reopen. It predicts annual home sales growth will be the highest in almost 40 years as financial certainty brings more sellers into the market to meet the heavy demand and technology allows for faster connections with interested buyers. Even so, rising home prices, mortgage rates and rents will bring affordability challenges that must be faced.
Zillow forecasts 21.9 percent annual growth in home sales for a total of almost 6.9 million homes sold. That would be the biggest annual sales growth since 1983. It said home price appreciation will reach its fastest pace since the Great Recession, as the inventory crunch continues to pit buyers against each other, competing for a scarce number of homes for sale. Zillow predicts home price appreciation to exceed 10 percent in 2021.
Zillow foresees a perfect storm of market conditions that will create the hottest spring shopping season in recent memory, with sales happening quickly and often above list price. Many prospective homeowners will become more certain about whether their jobs will be performed remotely long term, which could add buyers to the market who had been waiting for that question to be settled. Rising mortgage rates could also add to the buyer frenzy. Zillow predicts that although dense, urban living got a bad rap this year because of the pandemic, city living will almost certainly enjoy a renaissance in 2021.