What does the future hold for Clark County Housing?
Posted October 25, 2021 in Real Estate Trends
The future’s so bright, I gotta wear shades!
One of the many benefits of being an affiliate member of the Association of Realtors is learning local and national experts’ predictions on the direction of the real estate market. Just four days ago, the Chief Economist for the National Association of Realtors, Dr. Lawrence Yun, shared his thoughts in a Zoom meeting with the local Realtor Association (CCAR).
Dr. Yun didn’t use the “future’s so bright” line, but his outlook is positive. His main reason: the lack of inventory (homes available to buy) should ease. More homes will come on the market due to increased new construction, people returning to work, and the end of rules that have kept defaulting borrowers and renters from being foreclosed upon or evicted.
COVID has caused both good and bad things to happen in real estate. Bad, as in pandemic-related unemployment and increasing defaults in rental and mortgage payments. Good, as in causing people to choose larger homes, both because we are spending more time at home and because more people are working from home. The uncertainty caused by the pandemic made birth rates fall and death rates rise—just as happened during the Great Depression. With people becoming more used to our “new normal,” that should mean more confidence for buyers and sellers.
Yes, there’s a black cloud on the horizon in rising interest rates, but if our record low rates rise from 3%-ish to 3.7% by the end of 2022, they will still be extremely low compared to the worst of times of 10-15%. Real estate has historically been a good protector against inflation: in the 1970s, when inflation was above 7% (the highest in the last 50 years), home prices rose nearly 10%. In every decade since, the increase in home values has nearly always kept pace with inflation and, so far in the 2020’s, has quadrupled inflation.
In short, the coming year should be a good one for real estate in Clark County.
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