Return To Normalcy (CONT’D FROM PAGE 22)
figures are finally tallied, which would surpass the five per- cent increase of the previous year. One key reason: tight supply. “Housing has been a seller’s market with low in- ventory levels as homeowners have been reluctant to of- fer their residences up for sale for fear of contracting the coronavirus,” says Koropeckyj. The industry itself has engaged in practices that have contributed to its success. “Real estate professionals have done a great job adapting to social distancing, and en- abling the buying and selling of homes, appraisals, title in- surance policies and closings at the same pace as before the pandemic,” says Bill Conerly, Principal of his own con- sulting firm in Lake Oswego, Oregon ( conerlyconsulting. com ). “With the shift to suburban living, more new homes will be built.” Despite its recent success, the housing industry faces its own headwinds. “We expect prices to fall by 0.3 per- cent in 2021 as foreclosures mount due to an unwinding of forbearance measures by the federal government and private lenders,” says Koropeckyj. “According to the latest Senior Loan Officer Opinion Survey, banks have tightened standards across all sorts of mortgage products.” And the housing sector faces other issues that will sound familiar to anyone who has watched the industry over the past several years. “Construction costs are rising quickly, and builders are still grumbling about the inability to find buildable lots and skilled labor,” says Koropeckyj.
more good news in 2021. “Housing demand has bounced back thanks to very low mortgage rates and the release of pent-up demand,” says Koropeckyj, who points to healthy builder confidence as the nation enters the new year. The road ahead looks sunny indeed: “We forecast housing starts will surge by 16.8 percent in 2021, after
slowing to 2.9 percent in 2020 from 3.8 percent in 2019 due to the initial impact lockdown orders had on construc- tion,” says Koropeckyj. Median prices for existing homes are also increasing at a healthy rate, expected to top 7.6 percent when 2020
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November 9, 2020
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