You May Be Busier Than Ever in Northern California’s Hot 2021 Real Estate Market
Despite the onset of the COVID-19 pandemic last year, the Northern California real estate industry has remained strong. In 2021, markets across the state (our Business Development Executive in Northern California, Nicole Talbott, highlights Sacramento, Roseville, Arden, Arcade, San Jose, Sunnyvale, Santa Clara, and Fresno specifically) are forecasted to continue that momentum. With high demand, waning unemployment rates, and rapidly rising home sale prices, real estate agents all across Northern California should gear up for another booming year.
2021 Northern California Real Estate Outlook: Hot
In November 2020, the average home in California was priced at $609,757, a 9.0% increase year-over-year. There’s little sign of prices stalling, though, as Zillow predicts this figure will rise another 10.6% within the next year. Rising prices echo the gradual healing of the economy statewide, signaling that this year could be profitable for agents and sellers alike, while low-interest rates maintain some degree of affordability for buyers.
Along with rising home prices, home sales statewide grew 26.3% year-over-year in November 2020. Inventory also fell a significant 27.5% over the course of the year. Between lasting low-interest rates bolstering demand and a consistently low supply, Northern California is a seller’s market as 2021 unfolds.
After the economic tribulations of 2020 and as more and more people flock to the Golden State, rent prices increased 4.3% statewide and 6.9% in the Sacramento metro area. Meanwhile, only 0.3% of California homeowners fell delinquent on their mortgage, and equity slipped into the negative on only 1.5% of homes statewide. So, while new renters and buyers alike make the move to Northern California, current homeowners continue to thrive as well.
2020 Northern California Real Estate Market Data
|Zillow Home Value Index||$609,757|
|1-Year Change on Home Values||+9.0%|
|1-Year Change on Rent Prices||+4.3%|
|Homes With Negative Equity||1.5%|
|Delinquent on Mortgages||0.3%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for Northern California
In November 2020, the California Employment Development Department reported that California’s unemployment rate had dropped 1.8%, landing at 9.3% statewide. While still higher than the national average, Northern California’s improving job market shows promise. As healthy economic activity often correlates with growth in the real estate industry, narrowing unemployment rates are a positive sign for agents the year ahead.
Despite the traditionally hot spring and summer buying seasons far behind us, closed sales increased a whopping 13.0% year-over-year in October 2020. This momentum illustrates a departure from the typical seasonality of home buying and is a good sign for the coming winter months. Buyers are still eager to commit, even without the draw of spring curb appeal and open houses.
This momentum isn’t limited to just residential either - commercial real estate is hot, too. Highlights include an $85.5 million Vacaville facility acquired by a real estate investment firm, the $281 million sale of a San Jose research and development park, and the acquisition of a 102,466-square-foot industrial facility in Gilroy. These major investments in Northern California’s economy are yet another bright spot in the coming year.
With a strong 2021 forecasted, Northern California real estate agents will need to be at the top of their game. From buyers battling rising prices to sellers fielding multiple offers, there has never been a better time to serve your fellow Californians. This year, agents can expect to benefit from and help contribute to a booming local and national economy as the Northern California real estate market heats up.
Take On 2021 With the Best California Real Estate Courses From The CE Shop
Enroll in our Pre-Licensing program now to get your career started and begin connecting your fellow Californians with the home of their dreams. Or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to stay up to date on everything California? Join the Western Real Estate Facebook Group!