Top 5 Trends for Sun Valley Real Estate in 2021
After wrapping up what many will refer to as a record-breaking year in real estate, we’re looking ahead to what 2021 may have in store. The Wood River Valley experienced incredible sales volume this past year, with inventory levels hitting an all-time low as we approached the holiday season and real estate sales crossed $1 billion.
So, where does that leave us for 2021?
Here are our top five trends we can expect in 2021 real estate:
Local inventory will increase (but not by much)
Home prices will continue to climb
Demand for commercial real estate will rise
Mortgage rates will stabilize
If you’re on the fence, 2021 is the year to buy a home
1. Local Inventory will increase (but not by much)
Towards the end of 2020, we saw local inventory levels hit historic lows. With an influx of buyers to the Wood River Valley, the large majority of residential properties and vacant lots were purchased and taken off the market. But will this trend hold in 2021? It just might.
With a number of different motivators driving home sales during the pandemic, there’s still a wide range of comfort levels when it comes to real estate supply and demand. Uncertainty continues to restrict a portion of the inventory as home owners choose to wait and evaluate the impact of COVID-19.
Although some degree of inventory will re-enter the market as a result of the end of forbearance, we don’t expect this at the local level. We predict Sun Valley’s inventory to remain low, with mild improvements towards the end of 2021.
2. Home prices will continue to climb
Like any good textbook supply-and-demand equation, lower inventory levels drive up the value of available properties. With fewer homes on the market, buyers are willing to pay more for that real estate. Of course, there are a number of other factors that are driving buyer demand (like lower interest rates, which we’ll cover on Trend #4). Year over year, we’ve seen a 7% increase in prices. We expect the same trends to hold through 2021.
3. Demand for commercial real estate will rise
Perhaps an indirect effect of the residential influx to the Wood River Valley is an increased demand for commercial real estate.
With more full-time residents now in Blaine County, we will likely see a need for additional office spaces and commercial facilities. Especially as the effects of the pandemic lessen and work-from-home protocols start to shift back to traditional office environments, we expect to see more opportunities for commercial properties. Live-work spaces in particular are likely to offer appealing advantages for those who want to keep the flexibility that remote work offered during the pandemic.
4. Mortgage rates will stabilize
According to Freddie Mac, we can anticipate rates to stabilize around 3% for a 30 year fixed mortgage. We might fluctuate towards 2.7% or 2.8%, but we’ll see consistent rates through the majority of 2021.
Overall, we are nowhere near where rates were back in 2017 or 2018. This time in 2018, rates were hovering in the 4.8% to 4.4% range. Only starting in 2019 did rates start to fall, and have continued to do so through 2020—spurred on by the economic impacts of COVID-19.
5. If you’re on the fence, 2021 is the year to buy a home
Looking at the bigger picture, 2021 is going to be a great year to buy a home. Not only are mortgage rates offering a favorable lending environment for those who are planning to purchase, but additional inventory and growing optimism in regards to the pandemic both help create a great market for homebuyers.
Have other projections for the 2021 real estate market? Leave a comment below!