Second-Half Predictions

As we enter the middle of 2021, many are wondering if we’ll see big changes in the housing market during the second half of this year. Here’s a look at what some experts have to say about key factors that will drive the industry and the economy forward in the months to come.


“. . . homes continue to sell quickly in what’s normally the fastest-moving time of the year. This is in contrast with 2020 when homes sold slower in the spring and fastest in September and October. While we expect fall to be competitive, this year’s seasonal pattern is likely to be more normal, with homes selling fastest from roughly now until mid-summer.”

National Association of Realtors (NAR)

Sellers who have been hesitant to list homes as part of their personal health safety precautions may be more encouraged to list and show their homes with a population mostly vaccinated by the mid-year.”

Danielle Hale, Chief Economist at realtor.com

“Surveys showed that seller confidence continued to rise in April. Extra confidence plus our recent survey finding that more homeowners than normal are planning to list their homes for sale in the next 12 months suggest that while we may not see an end to the sellers’ market, we might see the intensity of the competition diminish as buyers have more options to choose from.”

Freddie Mac

We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”

Lawrence Yun, NAR

“Higher home prices and higher mortgage rates are simply squeezing away those homebuyers that are right at the margin.”

Top Markets in 2021

Zillow Survey Predicts Austin will be the Nation’s Hottest Housing Market, Leading a Sunbelt Surge
More affordable metros are replacing expensive coastal areas as top drivers of home value growth
— A panel of economists and real estate experts expect Austin to outperform the national market by the largest margin, followed by Phoenix, Nashville, Tampa and Denver
— Expensive coastal markets New York, San Francisco and Los Angeles are most likely to underperform, though Zillow expects growth in every market
— Key tailwinds include an improved economic outlook underpinned by progress on coronavirus vaccines, while affordability and available supply are potential drags

SEATTLE, Jan. 19, 2021 /PRNewswire/ — Austin will be America’s hottest housing market in 2021, leading a list of mostly Sun Belt cities expected to continue heating up faster than the nation’s large coastal markets, according to a new Zillow® survey of experts.

The booming Texas destination heads a lineup of sunny and relatively affordable metro areas — PhoenixNashvilleTampa and Denver — that are most likely to outperform the nation in home value growth, according to a panel of economists and real estate experts recently surveyed by Zillow.

The Zillow Home Price Expectations Survey, sponsored by Zillow and conducted quarterly by Pulsenomics LLC, asks a large panel of economists, investment strategists and real estate experts for their predictions about the U.S. housing market. The Q4 survey also asked about their expectations for 2021 home value growth in 20 large markets compared to the nation.

An overwhelming 84% of those surveyed said Austin values would out-perform the national average, compared to just 9% who believe it would fare worse. Phoenix came in second with 69%, followed by Nashville (67%), Tampa (60%), and Denver (56%). Page views on Zillow for-sale listings in Austin by out-of-town searchers were up 87% in November compared to 2019. 

The top-five metros are all affordable options compared to expensive coastal areas that have led home appreciation ranks in recent years, providing relative value for Millennials looking to take advantage of low mortgage rates to buy their first home. The top five are also, for the most part, sunny locales. Four of the five counties holding the largest cities in these MSAs all rank in the top-third of counties in the contiguous U.S. for average daily sunlight, according to NASA data analysed in The Washington Post. Davidson County, home to Nashville, ranked just below the midline.

“The pandemic has not upended the housing market so much as accelerated trends we saw coming into 2020,” said Zillow senior economist Jeff Tucker. “These Sun Belt destinations are migration magnets thanks to relatively affordable, family-sized homes, booming economies and sunny weather. Record-low mortgage rates and the increased demand for living space, coupled with a surge of Millennials buying their first homes, will keep the pressure on home prices there for the foreseeable future.”

An improved economic outlook thanks to COVID-19 vaccine roll-outs and better treatments was pegged as the most likely tailwind for the housing market in 2021, followed by sustained strength in first-time home buying among Millennials. It proved a powerful demand driver in 2020 and is expected to persist for years to come.

Link to Zillow Article

Zillow Increases Appreciation Forecast

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%:

La Jolla:

Carmel Valley:

Del Mar:


SE Carlsbad:

NW Carlsbad:

NE Carlsbad:

SW Carlsbad:

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!


San Diego #1 in USA

Either we are undervalued, or we’re getting more popular….and maybe both!

The price of a San Diego home could increase by more than 8 percent this year, more than anywhere else in the nation, according to a forecast released Tuesday.

Real estate analysts CoreLogic said the price of a single-family home in San Diego County will increase 8.3 percent from November 2020 to November 2021. That means the median price of house in San Diego could be around $776,000 by the end of the year.

CoreLogic said main reason is a lack of homes for sale that will push up prices as buyers fight it out. A secondary factor is income growth for highly skilled positions in San Diego County.

It isn’t out of the ordinary for San Diego homes to increase a lot in a year — in fact, single-family homes here were up 9.5 percent last year — but the forecast is noteworthy because CoreLogic predicts most markets will see price appreciation slow in most markets.

The only regions that the real estate analysts say will come close to climbing as much as San Diego will be: Miami, predicted to increase 3.2 percent; Los Angeles, up 3.2 percent; and Washington, D.C., up 2.9 percent. CoreLogic said the total national increase should be around 2.5 percent.

“San Diego is just one of those markets that has had a lot of income growth and not enough supply to meet demand,” said Selma Hepp, CoreLogic deputy chief economist.

She said San Diego is an example of what has been seen a lot across the nation: High-wage workers who have been able to work from home have seen fortunes increase during the pandemic while low-wage workers lost income because their jobs were among the first shuttered during shutdowns.

“Income inequality is being exacerbated by all of this,” Hepp said.

Link to full U-T Article

Frenzy Duration

We’ll be all frenzied up for the next few months – when will it cool off?

The real estate market will likely mirror the course of the pandemic.

You’ve probably heard the comparison to the Roaring 20s – the boom that kicked off when World War 1 and the Spanish Flu of 1918 were over and automobiles and telephones fueled the new economy.  Just the relief of seeing the coronavirus beginning to clear should cause more people to get out and about….but getting back to normal could mean less real estate frenzy.

Mortgage rates will reflect the improvement, and rise accordingly.

Don’t expect rates to budge the moment he takes the oath of office, but a Biden administration could eventually impact the direction of mortgage rates.

“Expect tax rates to rise, the Fed to offset increasing inflation with higher rates, and the economy to slow,” Guy Baker, founder of Wealth Teams Alliance, tells The Mortgage Reports.

And there’s this, from Rick Sharga, executive vice president at RealtyTrac: “Biden has called for more government investment in affordable housing, which could be funded in part by proceeds from fees attached to home sales backed by government agencies like Fannie Mae, Freddie Mac, and the FHA.”

Baker, Sharga and other experts polled by The Mortgage Reports in October predicted 30-year rates would rise to an average 3.51% in 2021 under a Biden administration.

When home buyers hear that rates are going up, they will be tempted to hit the brakes and wait until sellers start lowering their prices to compensate.  Think sellers will lower their prices? Me neither, and the market will probably stall out for months or years, much like it did after the Rocking 2013 Frenzy.

My guess is that we have six more months of frenzy in the bag.

But there will be enough other distractions that the super-hot market will fizzle out by July/August.

Or the first day that mortgage rates hit 3.50%, whichever comes first!

What do you think?

Hello 2021 Frenzy!

When will we know more about the 2021 frenzy?

We already know it’s going to be hot – look at the sales count for this month, plus we have 285 pendings:

NSDCC December Sales

December Sales
The Following January Sales
% Drop-off

We knew that 2020 was going to be better than usual just by the 185 sales in January. Then the pandemic derailed us for a couple of months, but we gained it all back in the second half of the year and 2020 wound up with the most annual NSDCC sales ever.

The drop-off from December to January a year ago was only 19%, so if we see about the same decline next month, we’ll know that the frenzy is continuing.  We have 283 December sales this morning, and once we add today’s sales plus the late-reporters we’ll probably be around 310 sales for this month(!!!).

If next month’s sales end up around 251 or higher (310-19%), then we’ll know that the frenzy is continuing.

The last frenzy happened in 2013, and you can see how it continued into early 2014 with only a 17% drop off.  But by the end of 2014, the frenzy was over – expect the current frenzy to die down by the end of 2021.


2021 Predictions

Let’s try to predict what will happen in 2021!

For fun, our reader The Old Man suggested we look back at the predictions for 2020.  I had guessed that sales would drop 10%, with the NSDCC median price rising 2% to 3% – here’s last year’s blog post:


The 2020 sales count is already 12% ABOVE last year’s sales, and is the highest in history – and we’re not done yet.  Is it even possible to have MORE sales next year?  Yes, but only if we get a surge of inventory.

This is where it gets interesting.

The number of 2020 listings was 5% below last year, and 7% below the 2018 count. If we just get back to last year’s numbers, it will feel like a surge, but it’s really just going back to normal.  I think the extra 5% is in the bag, and because of the additional reasons for people to sell, we will have a surge that will blow way the recent numbers of listings.


  1. We will have 10% more NSDCC listings than we had in 2020.
  2. We will have 10% more sales.
  3. We will have a 10% increase in the NSDCC median sales price.

And that, my friends, is what a FULL-BLOWN FRENZY looks like.


Home Prices in 2021

Bill has his annual forecast on home prices here:


Here is a snapshot of the forecasts:

(I was reading the previous chart wrong when I said that all were forecasting 7% to 10% appreciation. This is the accurate chart, with the old fuddy-duddies still lagging behind in the safety zone of 2% to 3%)



Zillow Forecast 2021


  1. I can’t remember any prognosticator predicting double-digit appreciation before.
  2. There will be areas who will have higher than 10.3% appreciation in 2021.
  3. Zillow has guts to put it out there. They could have played it safer. Do they know something?
  4. They are forecasting that our appreciation rate will be around 11% – stand by for impact!




Top 20 Real Estate Markets in 2021


Link to Article

The experts at realtor.com think our pricing will go up 5.5% next year, and the folks at Zillow have predicted around 8% for areas between La Jolla and Carlsbad. I think we’ll be hitting +6% to +8% by summertime, so let’s put that aside and look at the number of sales predicted here – because it all starts with inventory.

Here are the annual NSDCC sales from the last big frenzy year, 2013, plus last year and the projected numbers for 2020 (I added the December, 2019 count to the first 11 months of 2020) – to which I multiplied by the 11.3% forecast by realtor.com to get the 2021 listings and sales:

Total # of Listings
Total # of Sales
Median SP
# of Sales Under $1M (% of total)
1,692 (55%)
670 (24%)
563 (18%)
2021 (f)

For sales to increase next year, we need more lower-priced homes to sell – there aren’t enough buyers to pick through the hundreds of homes who are asking $2,000,000+ (there are 361 for sale today).

What are the lower-priced homes? The older, smaller homes owned by boomers for decades.

For 2021 to reach the peak frenzy of all-time, we will need the boomer liquidation to commence – or the biggest move-up event in history, which is unlikely because contingent sales get no traction with listing agents. Move-uppers have to buy the dogs to get a contingent deal to stick – and they aren’t moving unless they can really upgrade into a much nicer home.

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