Redfin Chief Economist
This is the second installment of our economist Q&A series of the top housing market forecasts for 2021 that focus on everything from home sales to mortgage rates. To help provide as much guidance as possible on what to expect in 2021, HousingWire interviewed a top economist every Tuesday in December in the HW+ Slack channel.
In this installment, HousingWire interviewed Daryl Fairweather, chief economist at Redfin, on her 2021 forecast article on home sales. This article has been lightly edited for length and clarity.
HW: To kick us off, you said home sales will reach their highest level since 2008, why is that? And more specifically, why do you think we will see more sales next year than we saw in 2020?
Daryl Fairweather: Life has changed drastically for all Americans this year, and for many that means they’re going to move into homes that fit their new lifestyles. We already saw a lot of that movement this year, but I do think that there are a number of sellers who were nervous to list during the pandemic, and will be ready to sell in the coming months. That new inventory combined with increasing demand from buyers is going to result in a lot of home sales!
HW: During our last Q&A with Haus’ Ralph McLaughlin, he said we might start seeing a swing toward a buyer’s market next year, but you’re calling seller’s market. Why is that?
Daryl Fairweather: Good question – I do agree with Ralph in that the market may be more balanced compared to the huge advantage sellers had this year, mostly for the reasons I just shared above. However, I don’t think that’s enough to overcome the profound inventory crisis we’ve been facing in many places. Buyers are still going to face competition, especially for single-family homes with lots of space. They’re really going to have to be intentional about preparing for their home search, getting pre-approvals, and moving quickly once they find something they love.
HW: Shifting the conversation to how tech is impacting the home search process, do you see the move toward technology continuing, or do you think we will get back to the “traditional” way of buying and selling a home once the pandemic subsides?
Daryl Fairweather: As somebody who just made a cross-country move in the middle of the pandemic, I’d say we’re never going back to how things were. I just moved from Seattle to Wisconsin, and it was surprisingly easy compared to what it was like buying and selling a home five years ago. I did 99% of my search for a home online, and only viewed in person the home I ultimately bought. I filled out all of my mortgage paperwork online too, and the online portal I used was extremely user friendly. I wasn’t nervous at all about closing on time– the whole process only took a couple of weeks.
HW: You spoke about in your commentary how technology has changed not only how we buy and sell homes, but also how many home sales we have seen. Can you go over that? How can tech help increase home sales?
Daryl Fairweather: Technology removes many of the barriers people have to purchasing a home. First-time buyers have all the information they need at their fingertips. You no longer have to have a day off to go on tours when you can do 3D walkthroughs between meetings, and you can sign paperwork on your smartphone. When you make it easier to buy and sell homes, you buy and sell more homes.
HW: What is the greatest opportunity for real estate agents in the year ahead?
Daryl Fairweather: All of this movement is going to give agents the opportunity to meet new clients from all over the country and establish some great relationships with them. I think the most successful agents will be the ones who are savvy with the technology available to them and leverage it to create even more trust and that “wow factor”.
HW: Thanks for coming on to do this Q&A. As we wrap up, do you have any other closing thoughts?
Daryl Fairweather: It’s been an unpredictable year in the housing market. I think we learned that the fundamentals of the housing market truly are strong, so 2021 should see more home sales and continued price growth. People want to become homeowners, and I don’t see that changing any time soon. The problem the country will face is how do we make it so more people have a chance at achieving that goal? There simply aren’t enough homes right now for everyone who wants to become a homeowner. Building more affordable homes is going to be a challenge, but at least now people are interested in moving to parts of the country where homes can be built more affordably than in expensive cities.
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