2020 was a blockbuster year for home sales, but many experts are projecting that there will be even more sales – and even more increases in home values – in 2021.
NAR chief economist Lawrence Yun predicts new-home sales will jump 21 percent and existing-home sales will climb 9 percent in 2021. He predicts home prices will rise by 3 percent in 2021.
According to Zillow’s Home Value Index, the company expects seasonally adjusted home values to increase by 3.7% from December 2020 to March 2021, and by 10.5% through December 2021. It also predicts home value appreciation to peak in June 2021 at 13.5%.
Approximately 5.6 million existing homes were sold in 2020, a 5.3% increase from 2019. Zillow predicts 6.82 million existing home sales in 2021, the most recorded in a single calendar year since 2005 and a 21.1% increase from 2020.
Quarterly Zillow Home Value Index growth as of December 2020 was 3.2%, the strongest three-month appreciation since 1996.
In an interview with MPR, former president of the Minneapolis Area Realtors said there were “more home sales in the year 2020 in the Twin Cities than we’ve ever had before.”
Urbanski also pointed out that many other areas of Minnesota are seeing extraordinary sales. “Areas that have lakes and woods and a lot of outdoor opportunities have done very, very well during the pandemic,” he said. He specified communities such as Brainerd, Duluth, Baxter, Detroit Lakes, Fergus Falls and Alexandria as places that have been very hot and will continue to be that way in 2021.
Chris Galler, the CEO of Minnesota Realtors, said the western part of the state saw a slower pace of sales than the rest of the state, but even that area had more closed sales in 2020 than it did in 2019.
All of this commentary tends to indicate that Minnesota will likely fall in line with many other parts of the country in terms of approaching or setting new records for home sales in 2021.