2021 Market Forecast

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Real Estate

The Market & Industry: C.A.R. revises 2021 forecast higher than previously estimated The California housing market started the year off strong. The statewide median price hit $699,890 in January 2021, down from $717,930 in December 2020, but up 21.7 percent from January 2020. Home sales in January were up 22.5 percent from a year prior, driven by strong growth in California’s core housing markets, in particular the San Francisco Bay Area. Based upon strong January closed sales, encouraging weekly data for February, low rates, and ongoing growth in various measures of buyer demand, C.A.R. revised its forecast for home sales and prices in 2021 higher than previously estimated. Existing single-family home sales are expected to rise by more than 11 percent this year, and home prices are expected to increase by 8 percent. Lumber prices are up 170 percent over the past 10 months, prompting a rise in new-home prices. In response, housing production softened in January, with overall housing starts down 6 percent nationwide.