According to the latest CoreLogic Home Price Insights Report, nationwide home values (includes RCFE homes) increased by 8.2% over the last twelve months. The dramatic rise was brought about as the inventory of homes for sale reached historic lows at the same time buyer demand was buoyed by record-low mortgage rates.
As CoreLogic explained:
“Home price growth remained consistently elevated throughout 2020. Meanwhile, the availability of for-sale homes has dwindled as demand increased and coronavirus (COVID-19) outbreaks continued across the country, which delayed some sellers from putting their homes on the market. While the pandemic left many in positions of financial insecurity, those who maintained employment and income stability are also incentivized to buy given the record-low mortgage rates available; this is increasing buyer demand while for-sale inventory is in short supply.”
Where will RCFE home values go in 2021?
RCFE home price appreciation in 2021 will continue to be determined by this imbalance of supply and demand. If supply remains low and demand is high, prices will continue to increase.
Housing Supply
According to the National Association of Realtors (NAR), the current number of single-family homes for sale is 25% lower than last year at this time.
However, there is some speculation that the inventory crush will ease somewhat as we move through the new year for two reasons:
1. As the health crisis eases, more RCFE homeowners will be comfortable putting their RCFEs on the market.
2. Some RCFEs impacted financially by the pandemic will be forced to sell.
Housing Demand
Low mortgage rates have driven homebuyer demand over the last twelve months. According to Freddie Mac, rates stood at 3.72% at the beginning of 2020. Today, we’re starting 2021 with rates one full percentage point lower than that. Rates to finance RCFEs are higher than rates for typical residential loans but are also considerably lower than one year ago. Low rates create a great opportunity for RCFE homebuyers, which is one reason why demand is expected to remain high throughout the new year.
Taking into consideration these projections on housing supply and demand, real estate analysts forecast homes will continue to appreciate in 2021, but that appreciation may be at a steadier pace than last year. Here are their forecasts:
Bottom Line
There’s still a very limited number of RCFE homes for sale for the great number of RCFE buyers looking to buy them. As a result, the concept of “supply and demand” mandates that RCFE home values in the country will continue to appreciate.
If you are considering buying, selling or leasing an RCFE, please call us TODAY to explore your options. We would be delighted to evaluate your business and provide price guidance. We will help you obtain the highest possible price for your RCFE.
Michelle (949) 397- 4506 & Melvyn (949) 500-3630
