Will The 2020 Housing Market Continue in 2021? Key Insights
The housing market in 2020 defied expectations, as it remained surprisingly robust despite challenges like the pandemic and housing inventory shortages. As we look ahead to 2021, many are wondering, “Will the 2020 housing market continue in 2021?” While it’s difficult to predict every nuance, the data suggests that the factors that made 2020 a strong year for real estate will likely carry over into the new year. In this blog, we’ll explore key trends that will shape the housing market in 2021 and what they mean for buyers, sellers, and commercial real estate investors.
The Impact of Low Inventory and Rising Home Prices
One of the primary factors that made the 2020 housing market stand out was the low inventory of homes for sale. The National Association of Realtors (NAR) reported that housing inventory hit record lows, with fewer than 1.5 million homes available for sale, which was a 19% decrease from the previous year. This inventory shortage has created a seller’s market, where competition is fierce, and homes are selling quickly.
Looking forward, experts predict that the inventory shortage will continue into 2021, making it more difficult for homebuyers to find their ideal property. As a result, sellers will likely continue to benefit from bidding wars and higher-than-expected sale prices. In fact, some industry leaders, like Doug Duncan, Senior VP and Chief Economist at Fannie Mae, predict home prices will rise in 2021, albeit at a slower pace due to more new construction and slight market adjustments.
What This Means for Buyers:
For buyers, 2021 will likely bring the same challenges seen in 2020, limited options and the pressure to act quickly. With fewer homes available, potential buyers need to be prepared for bidding wars, especially in popular suburban and metropolitan areas. One key strategy is to secure mortgage pre-approval before entering the market, ensuring you’re ready to make offers swiftly.
What This Means for Sellers:
For sellers, now is still a great time to list. Despite the challenges faced in the pandemic, sellers have the upper hand due to the limited number of homes on the market. Those who list their properties can expect to receive competitive offers quickly, especially if they price their homes strategically. If you’re thinking about selling in 2021, it’s important to consider professional advice to ensure your home is marketed effectively.
The Continued Influence of Remote Work and Lifestyle Shifts
Another major shift in the housing market in 2020 was the growing demand for larger homes with more space for remote work and home schooling. With more people working from home and spending more time indoors, homes with home offices, spacious kitchens, and larger backyards became more desirable. This trend is expected to continue into 2021, with more buyers prioritizing these features when making purchasing decisions.
Moreover, many people who previously lived in densely populated metropolitan areas are now considering suburban or even rural areas. The flexibility to work from anywhere has opened up opportunities for buyers to explore regions they might not have considered before.
What This Means for Buyers:
For homebuyers, this trend opens up a wider variety of options. While inventory is still limited, the demand for homes outside urban centers means that buyers can find great opportunities in suburban markets. These areas offer larger homes at a more affordable price point compared to the cities, making them a viable choice for families or individuals seeking more space.
What This Means for Investors:
For commercial real estate investors, this shift toward suburban areas also presents a potential opportunity. As businesses continue to embrace remote work, demand for office space in densely packed cities may decrease, while the need for industrial and logistics properties could increase, especially in areas closer to residential neighborhoods.
The Role of Low Mortgage Rates
One of the most significant factors influencing the 2020 housing market was historically low mortgage rates. The Federal Reserve kept interest rates at near-zero levels to stimulate the economy during the pandemic. As a result, mortgage rates fell to record lows, making it more affordable for buyers to purchase homes.
While mortgage rates are expected to rise slightly in 2021, they are still likely to remain low by historical standards. This will continue to make home buying more affordable, especially for those seeking long-term financing.
What This Means for Buyers:
With mortgage rates expected to stay low in 2021, buyers who can act quickly can lock in favorable rates for the life of their loans. This creates an opportunity for buyers to purchase homes at a lower cost compared to previous years, allowing them to maximize their purchasing power.
What This Means for Sellers:
For sellers, low mortgage rates can help attract more buyers to the market, even if inventory is low. Buyers who are on the fence about purchasing might be more willing to make a move if they can secure a mortgage at a competitive rate, boosting overall demand.
Commercial Real Estate Market Outlook
As the housing market flourishes, the commercial real estate sector is experiencing its own set of challenges and opportunities. While retail and office spaces have struggled due to the shift toward remote work and online shopping, other sectors, such as industrial and logistics properties, have benefited from the increased demand for e-commerce and distribution services.
For investors in commercial real estate, 2021 presents a mixed bag of challenges and opportunities. While office and retail spaces may face a slower recovery, industrial properties are expected to remain strong as online shopping and last-mile delivery services continue to thrive.
What This Means for Commercial Investors:
Commercial investors should closely monitor trends in logistics and industrial property sectors, as these areas are expected to outperform others in the coming year. Additionally, with the potential for more businesses to adopt remote or hybrid work models, the demand for traditional office space may decrease, creating opportunities for adaptive reuse or redevelopment.
Conclusion:
In short, while the real estate market in 2021 will likely differ from 2020 in some respects, many of the factors that fueled its strength will continue to play a role. Low inventory, remote work trends, and favorable mortgage rates are all expected to impact the market throughout the year, making it a strong time for both buyers and sellers who are prepared to act quickly.
For commercial real estate investors, understanding these shifts in residential preferences and economic conditions will be crucial for identifying profitable opportunities. By staying informed and adapting to the “new normal,” both residential and commercial real estate markets are poised to remain competitive and dynamic in 2021.
Are you ready to capitalize on the 2021 housing market? Whether you’re buying, selling, or investing in commercial real estate, contact us today to discuss your options and develop a strategy for success in the coming year.
Cherie Edmunds Sullivan
Local Expert | Century 21 Results
A resident of the area for over 26 years, Cherie Edmunds Sullivan offers a level of local insight that only comes from deep roots in the community. As a top-producing REALTOR® in Cumming, Lake Lanier and North Metro Atlanta, Cherie is known for her “casual luxury” style, pairing high-end service with the unmatched perspective of someone who has watched this region grow and evolve firsthand. Cherie’s expertise is backed by proven results; in 2025, she was ranked the #8 individual agent out of approximately 400, a distinction that reflects her commitment to her clients’ success. By staying ahead of local market trends and new developments, she provides a strategic advantage to buyers, sellers, and investors alike. With the global power of Century 21 Results and over two decades of local history, Cherie remains the premier resource for navigating the North Georgia real estate landscape.
Sources:
- Redfin –
https://www.redfin.com/news/housing-market-news-september-2020/ - Housing Wire –
- CNBC –
- NAHB –
- MarketWatch –
- National Association of Realtors –
- Business Insider – https://www.businessinsider.com/how-2020-broke-the-housing-market-inventory-could-run-out-2020-9
- Forbes –
- Realtor.com –
https://www.realtor.com/research/top-consumer-home-features-coronavirus/ - Wealth Advisor – https://www.thewealthadvisor.com/article/covid-19-has-changed-housing-market-forever-heres-where-americans-are-moving-and-why
- Washington Post –
- Forbes –
- BankRate –
- National Association of Realtors –
- Forbes –
- TD Economics –
- Axios Media –
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