Real Estate Experts Predict Continued Economic Rebound in 2021
John Jordan | December 17, 2020
WHITE PLAINS—National and regional real estate and economic experts are in unison that the housing and some sectors of the commercial real estate markets, in spite of and in some cases due to COVID-19, will continue to rebound from the early days of the pandemic next year.
Hudson Gateway Association of Realtors officials and area real estate and business executives recently participated in a roundtable program hosted by the Business Council of Westchester where they offered assessments of the current markets and how they expect the housing and commercial sectors to perform in 2021. In addition, the National Association of Realtors staged a roundtable event earlier this month where it released its consensus forecast on the Gross Domestic Product, employment and housing prices in the coming year.
HGAR Chief Executive Officer Richard Haggerty said that conditions have markedly improved since the onset of the pandemic when the real estate industry was all but shut down by New York State in the hopes to prevent the spread of the virus. Since restrictions were lifted on in-person showings and home closings on June 9, the real estate market has been extremely active in the New York suburbs.
“What’s changed (since restrictions were lifted) is everybody is on a grand exodus out of the city,” said Haggerty, who is also president and chief strategic growth officer of OneKey MLS. “If you were to ask me in April or May would we be recovering in the residential resale area, I would have said, ‘If we get back to being flat or single-digit numbers I would be happy.’ That didn’t happen. We came roaring back.” He noted that the Westchester real estate market was strong in the first quarter and then saw single-family home sales decline by 22% in the second quarter due to the COVID restrictions.
“When agents were able to show properties in June, the market took off and quite frankly in a way that surprised me,” Haggerty said. “We have not totally recovered from the dip in the second quarter but it looks like if you are looking solely at single-family homes we will be about 10% above last year (at the end of 2020).”
“I think throughout the suburban (NYC) area, 2021 is going to be very bullish,” Haggerty predicted. “Home has taken on a whole new meaning with COVID and especially with single-family homes.” He noted that condo and co-op sales since COVID emerged have been flat, adding that condo and co-op owners in Manhattan are not looking to buy the same product in the suburbs.
Sarah Jones-Maturo, president of commercial brokerage firm RM Friedland, said that there is tremendous demand for residential development sites in Westchester, particularly in locations in Hastings-on-Hudson, Pleasantville and other non-transit-oriented development properties in the county. She said that among the interested investors include urban developers that previously considered only TOD locations.
In terms of her thoughts for the commercial markets in 2021, she believes that a return to experiential retail and a move back to corporate offices will begin in the summer of 2021. She did note that in terms of office usage, a “new normal” will emerge as remote work programs are here to stay.
“I think we are going to have to evolve,” she said. “By June, July of 2021 things are going to be somewhat normal again.”
Earlier this month, the National Association of Realtors reported that a group of experts predicted GDP growth of 3.5% and an annual unemployment rate of 6.2% in 2021. In 2020, home sales will reach 5.52 million, the highest annual mark since 2006, with the median home price setting a record high of $293,000, according to NAR.
Housing prices are expected to climb 8.0% next year and 5.5% in 2022, with 30-year fixed mortgage rates of 3.0% and 3.25% for 2021 and 2022, respectively, NAR reported.
The share of the U.S. workforce working from home will decline to 18% in 2021—down from 21% in 2020. The experts predict small declines in office and hotel vacancy rates in 2021, with a slight increase in retail vacancies next year.