The California Association of Realtors REimagine! Conference and Expo was held in a virtual format last week for all members of the state Realtor association. The conference began with an upbeat message from California Governor Gavin Newsom and a welcome by C.A.R. President Jeanne Radsick. The three-day event included a host of sessions with the most up-to-date information from speakers, panelists, exhibitors and more.
Newsom conveyed the state's many accomplishments and his certainty that California will get through the pandemic and continue to lead the country's economy. Newsom said he looks forward to working together with the real estate community.
"We are committed to Realtors' success," said Newsom.
At one session State Senator Toni Atkins, California Senate President pro Tempore (District 39), spoke on the priorities of the California legislature. She said the latest Senate housing package makes housing production possible, with opportunities for all income levels, protection for renters impacted by COVID-19, financial relief for small landlords, and streamlining the housing approval process. Atkins explained important bills like SB 995, legislation that extends California Environmental Quality Act (CEQA) streamlining for large-scale projects and expands the streamlining process to make more small projects eligible, and SB 1120, legislation that streamlines the process for a homeowner to create a duplex or subdivide an existing lot in all residential areas.
The 2021 housing market forecast was presented by C.A.R. Chief Economist Leslie Appleton-Young and Deputy Economist Jordan Levine. Appleton-Young traced the effects of the pandemic on the economy and housing market, noting currently, economic indicators have improved and there has been a robust housing rebound. Consumer spending has hit all-time highs. Consumer confidence is starting to rebound. Interest rates are still at record lows.
"An extremely favorable lending environment and a strong interest in homeownership will continue to motivate financially eligible buyers to enter the market," said C.A.R. President Jeanne Radsick in a statement. "While the economy is expected to improve and interest rates will stay near historical lows, housing supply constraints will continue to be an issue next year and may put a cap on sales growth in 2021."
The baseline scenario of C.A.R.'s 2021 housing forecast sees a modest increase in existing single-family home sales of 3.3 percent to reach 392,510 units, up from the projected 2020 sales figure of 380,060. The 2020 figure is 4.5 percent lower compared with the pace of homes sold in 2019.
The state median home price is forecast to edge up 1.3 percent to $648,760 in 2021, following a projected 8.1 percent increase to $640,330 in 2020 from $592,450 in 2019.
C.A.R.'s forecast projects growth in the U.S. gross domestic product of 4.2 percent in 2021, after a projected loss of 5 percent this year. The state's unemployment rate is projected to dip to 9 percent in 2021 from 2020's projected rate of 10.8 percent.
The average for 30-year, fixed mortgage interest rates is expected to remain low by historical standards. The rate are expected to be 3.1 percent in 2021, down from 3.2 percent in 2020 and down from 3.9 percent in 2019.
Realtor officials note while home prices have increased sharply in 2020, driven by strong sales of higher-priced properties and a limited inventory of homes for sale, they expect the pace of price growth to be more moderate in 2021.
"The uncertainty about the pandemic, sluggish economic growth, a rise in foreclosures, and the volatility of the stock market are all unknown factors that could keep prices in check and prevent the statewide median price from rising too fast in the upcoming year," said Appleton-Young.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
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