2021 Costa Mesa Real Estate Predictions

It’s that time again! New Year, new 2021 Costa Mesa real estate predictions! Always my most enjoyed post that I create each year. Here we go!

 

Low inventory plagues the market for the majority of the year. At the writing of this post, Costa Mesa real estate only has about 68 active listings which is the lowest number ever recorded since the MLS has been online digitally. Historic lows happened as recently as 2013, but with today’s high prices and low interest rates it is surprising. The Pandemic seems to be driving people to stay in and not to sell and or relocate. Will the inventory change? Yes, but not quickly. The beginning of the year will have poor inventory, changing to more inventory in the spring, but still historically low. Past August of 2021 I expect the inventory to increase considerably as prices slow.

 

Prices will continue to rise in the beginning of year. This area of my Costa Mesa real estate predictions for 2021 might be the most controversial – I think prices rise early in the year, then sellers start having to take price cuts towards the tail end of the year because the market will start to cool with high prices and slowly rising interest rates.

 

My Costa Mesa real estate predictions for 2021 will look like a camel’s hump – quickly rising in the January – May period, a small plateau in summer, followed by a gradual cooling in the fall. This is all assuming the vaccine rollout for Covid-19 goes as planned and ⅔ of the country is vaccinated by August of this year. Prices will cool in the fall due to increased inventory and rates that will be moving back into the mid 3% range.

 

Sadly, the days of the 2.5% mortgage may be over. We will start the year with low rates, but slowly and gradually rates will rise back into the mid 3.5% range for my Costa Mesa real estate predictions for 2021.

 

As prices rise, there are always those sellers looking for top dollar, sometimes well beyond normal market expectations. The ol’ “Well, I am sure if someone really wants my house, they will be willing to pay for it” thing will be alive and well, especially as the market starts to cool in the fall.

 

There are so many flippers that have thrived in the past 5-7 years, I cannot see with low inventory why flippers won’t continue to excel in this market in 2021 especially since inventory will remain low. Their trick will be to find the property that will be the hardest part.

 

Zillow, Redfin, OpenDoor, and a host of other companies including private investors will all be on the hunt for property they can buy, even at a small discount. Unfortunately, the thing most sellers don’t look past is the 6-7% fees they need to pay these iBuyers to get out of their homes. The “easy” part of the deal comes at a heavy upfront cost.

 

Buyers will be very, very frustrated this year, especially as inventory is slight. This won’t change until inventory changes. Some will even throw in the towel and continue to rent and wait out some kind of perceived market correction that may never come.

 

As much as the sales market is going up, rents will hold steady and the nicest homes will still command high rental amounts. Inventory of available rentals will continue to be poor. Unfortunately, there seems to be no end in sight for a change in the rental market.

 

There they are! My fearless Costa Mesa real estate predictions for 2021!

 

If you are looking for any help in Costa Mesa real estate, whether it is selling, buying, or just good old-fashioned advice, feel free to connect with me on my email or my cell phone at (714) 743-9882.

 

Thanks for reading! I wish you the best year!

 

Colin Delaney