So everybody asks this question, right? Will housing prices go down in 2021? Well that’s what I’m going to talk about in this post. I’m not going to address the whole of the U.S. but I am going to talk about what may happen in Oklahoma in 2021 to the housing market.
My name is Marcie Billen and I’m a real estate agent here in Norman, Oklahoma. I’m a realtor with Keller Williams Mulinix and Ruya Team Realty. Now I’m shooting this in 2020 and of course, everyone wants to know what’s gonna happen in the housing market in 2021. Maybe in 2020 you had thoughts of buying or selling your house but, you stayed inside and worked hard not to get sick or had to adjust to new life, and we totally get it. That’s why we want to address what’s going to happen in the housing market in 2021, and more specifically, the house prices. So if you are thinking about buying, selling, or maybe investing in real estate in 2021, you can kind of get an idea about what that’s going to look like for you. I cannot look into the future. I don’t have a crystal ball, so I’m going lay out these five ideas that I have for the 2021 housing market that other people also think are going to happen.
I’m going cover five different things that I think are going to happen in the Oklahoma housing market in 2021. Now, like I said I am a realtor in Norman, Oklahoma, so some of my numbers will be biased around that, and obviously that’s the market that I look at most often. However, I am familiar with the entire Oklahoma City metro area and the market. Now, once we move outside of those areas, not so much. If you live in the OKC metro and want more information on the specific house prices in your neighborhood, check out this link or feel free to reach out!
Five points about house prices for 2021 in Oklahoma
1. Interest rates
Right now interest rates are super, SUPER low and it’s amazing! So to put this in context for you, because like if you’re 25 and you’re like “what is low? like what does that mean?” Well, in the 80’s we saw interest rates – I mean when I say we; I was born in the 80’s, so like I didn’t see anything – but, we saw interest rates between 10% and 16% for housing in the 80’s. Now, our interest rates a lot of people are getting below 3% and between 3 – 4% percent is awesome!
Why is that such a big deal for house prices? Why are low interest rates such a big deal? Low interest rates are the number one indicator of affordability in a housing market. What does this mean? It means you may be able to get a little bit more for your house when the rates are lower, if you’re selling. And it means that you may be able to buy a little bit more house, if you’re purchasing a house because you’ll be able to afford more in your monthly payment. Is this a win-win? It absolutely could be; just depends on your situation.
2. Inventory
When we say inventory, we’re looking at homes that are for sale on the market. So the question is: will there be an increase of homes for sale on the market in 2021? And I think that there will be. This has been one of the biggest issues that we saw in 2020, is there weren’t any houses to actually sell buyers. Or there was a lot less there had been in the previous years. For instance, when we compare the market of 2019, like let’s take November. In November 2019 versus November 2020, we see that there are 35% less homes on the market between those two months. Between November of 2019 and November of 2020.
If you were looking to purchase a house in Oklahoma in 2020, you probably noticed that dip in inventory because you were like “I see five houses that I could be interested in” versus the 20 there would have been three years before. In 2021 we definitely see that we may have an end in sight for the pandemic, for the virus, right? So that means that we’re going to see people getting vaccinated. We already are seeing that and I think that that’s going to result in more people putting their homes on the market that have maybe been waiting for that. Some of our increase in inventory will also be new homes, as we’re definitely seeing builders ramp up on their sales and we’ll talk a little bit more about that later.
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3. The Rental Market
The rental market is always a question when it comes to house prices. And we’ve seen renters hit hard by you know, the economy and especially different places closing, like restaurants and things like that. What does that mean? Well evictions have a moratorium on them in Oklahoma until December 31st 2020. That could change, of course, and hopefully that will be extended a little bit for renters so they aren’t facing eviction, as fast as maybe they could be. What I believe this means for buying and selling, especially here in Norman is, I think we’re gonna see more and more investors who are reaching in retirement age, start to sell off their inventory. Why is this?
Well the houses they’re using for rentals have appreciated greatly in the past few years and most likely they’re going to see that they might get a lot of money this year for their their houses that they’ve been renting out. And maybe their renters are moving or buying their own houses, which we’ve been seeing a lot of because of the low interest rates. So if these investors are selling their houses that are between $100,000 – $200,000, that’s an amazing boost for Norman because we don’t have enough homes in that price range that are for sale. So the investors get their money and you, as a first-time homebuyer or someone who’s looking for a house of that size, gets to buy a house that maybe wasn’t on the market before because of the rental market.
4. Foreclosures?
This is always a question I’m getting from people: “Well foreclosures are happening, right”? No, they’re not happening. No foreclosure have happened because there’s been a moratorium on foreclosures as well as evictions. So what does that mean? Well first of all, we have to put into perspective, right? The housing market is SUPER slow; it’s a super slow market. It takes forever for us to catch up to anything that’s actually going on in the “regular economy”, right? Foreclosures take six months to sometimes two or three years to get that house on the market for sale, once the bank takes control of the situation. Banks are slow. They have a lot of red tape; that’s how it works.
So yes, we may see an uptick in foreclosures this year. I already have, just a little bit, and by just a little bit, I mean instead of seeing zero foreclosures come on the market every single week, I’m now seeing maybe one or two that are coming on the market, which isn’t very many compared to five years ago, right? Back then we saw a lot of foreclosures come on the market. So we’ll probably see an increase in these foreclosed homes and again, that’s going to mean that we have more inventory on the market for home buyers because of those foreclosed homes, which also means we could see the house prices change.
5. Migration to Oklahoma
We’re seeing a lot of people leave bigger and more expensive cities and states to come to Oklahoma. Why are they moving here? Our cost of living is very low, I have a video on the cost of living in Oklahoma you can check out. In Oklahoma, you can get a beautiful house on a decent sized plot of land that you can’t get in California, Washington State, New Jersey, South Carolina, and places like that. Not only can we can see this trend on a national scale, but also on a local one. We’re seeing people move away from cities because their bosses are saying “Well you don’t have to come to work anymore. You can just stay home and work from there.” And kids may be going virtual too, with some of the charter schools that are happening online.
So if you can get your own little slice of paradise 25 miles outside the city and once a week, you get to go into the city and buy groceries and do all these things, is that something you would consider doing? People are moving to the country from the city so they have space. They’re working from home, they want their outside space.
If you have more questions about your own micro market, then you can ask me!
