This browser does not support the Video element.
2020 is a year that will likely be remembered for many reasons, but optimism is not one of them. We started out the year on a high note but quickly descended into a worldwide pandemic, social and political upheaval, a national shutdown, and a dramatic blow to the economy.
But there’s light at the end of the tunnel, and it’s just now coming into view, so says FOX 5 real estate expert John Adams.
Adams says there are three specific reasons why he believes an economic recovery is just around the corner.
1. The economy will continue to improve
During the election, it was popular in some quarters to predict a housing bust for 2021 that would be worse than the 2009 Great Recession.
Instead, the truth is that 2020 is, from a housing standpoint, fundamentally different from 2009.
Today’s homeowner has far greater equity in their home than they did in 2009, and the biggest problem in today’s real estate market is lack of inventory. Household wealth in the US has already surpassed its pre-pandemic peak, a condition that sets the stage for continued recovery.
As the pandemic recedes, America is in a strong position to buy real estate. Unlike 2009, when millions were sold homes they could not afford, there is nothing fundamentally broken that needs to be fixed.
WATCH: FOX 5 Atlanta live news coverage
This browser does not support the Video element.
2. Interest rates are expected to remain low
Demand is peaking due to historically low home loan rates, and the Federal Reserve has indicated that we can expect mortgage rates to stay in the 3% range for at least the next 12 to 18 months.
Low rates translate into affordability, and as consumers become more confident, they will be prepared to buy the housing they want.
And since these loans are fixed-rate and feature a term of up to 30 years, buyers will know in advance what their obligations will be. No adjustable rate means no surprises.
A "Sold" sign seen in front of a home.
3. Home sales in 2021 are expected to grow
A severe shortage of homes for sale is the only serious challenge we are facing, and that is the result of owners being appropriately cautious during a period of striking uncertainty.
Owners and renters alike are reevaluating their housing needs in light of two trends we can expect to last: the shift from traditional office settings to working from home, and the full adoption of the multi-generational household.
A recent survey showed home-builder optimism is at an all-time high as we look into 2021. In other words, the builders are getting ready to dramatically boost new home construction, a shot in the economic arm of this economy.
That alone will help solve the inventory crisis.
We know that the currently available vaccines are over 90% effective. And many more vaccines are on the way. As the threat of COVID-19 recedes, the economy is set to recover with a vengeance. Adams is boldly predicting that 2021 will be a strong year for real estate and for America as well.
Download the FOX 5 Atlanta app for breaking news and weather alerts.