By KRISTI BAILEY
The largest generations in history will step up their influence on the housing industry in 2021. Millennials have already dominated the first-time buyer ranks, but the leading edge of GenZ, who are nearing their mid-20s, are stepping up. As the first Millennials turn 40, they have been in their homes long enough to build equity, and some are moving into bigger homes.
There are many unknowns about precisely how these two generations will affect existing home sales. Two things experts point to that will affect their buying power are putting down smaller down payments and taking on more debt. A majority of the respondents to a recent survey said low mortgage rates would enable them to buy a larger house. Add that to the possibilities of a $15,000 tax credit for first-time buyers and a student debt forgiveness. It could be the housing market equivalent of throwing gasoline on a campfire.
Both Millennials and GenZ buyers want more smart home options and energy efficiency. That is something sellers who have been waiting to list should consider. Some upgrades can move a listing to the front of the line. Typically, you would have some time between now and the beginning of the traditional peak buying and selling season to do these upgrades, but it looks as if the prime season may start in the next week or so. The National Association of REALTORS® forecasting panel expects an increase to be a 7% improvement over 2020. They forecast home price gains will ease in 2021 and end the year about 5.7% above 2020 levels. Locally, existing home prices were in double-digit growth mode during the fourth quarter of 2020.
One thing both buyers and sellers can be sure about is 2021 will be competitive and challenging. Buying a home is a sound financial decision that Millennials and GenZ are embracing. So, expect continued high demand, and despite the tight inventory, there are and will be good deals. That is why savvy house hunters partner with a local professional REALTOR® to identify and move on quickly opportunities when they present themselves.
NETAR is the voice for real estate in Northeast Tennessee. It’s the largest trade association in the Northeast Tennessee – Southwest Virginia region representing over 1,400 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries. Pending sales, monthly Trends Reports, and the regional market analytics can be found on the NETAR websites at https://netar.us/voice-real-estate-northeast-tennessee.