Last Updated on October 13, 2022
Allen Tate Companies President and CEO Pat Riley forecasts continued real estate market momentum and higher interest rates
At the beginning of each year, Allen Tate Companies President and CEO Pat Riley offers his annual forecast for the Carolinas’ residential real estate market.
But last year, his “2020 Vision” was a little distorted, thanks to the COVID-19 global pandemic – an event that no one could have predicted.
“Despite things not taking the predicted path, 2020 ended up as one of our very best years. And while we’re still in a world of uncertainty, we don’t have to look backwards. In 2021, let’s learn from the past, keep what works and build momentum for the future,” said Riley in the January edition of Carolinas Market Update.
Riley predicts that the real estate market will continue to ride the wave that dramatically turned the tide last summer. Recovery from a global pandemic will translate into a stronger economy – but ultimately, higher mortgage interest rates.
- Appreciation. Homes will continue to appreciate at a rate of 8 to 11.4 percent, depending on location, due to continued lack of supply. But Riley cautions that does not mean another housing bubble like 2006.
- Inventory shortage. Inventory will remain tight as Boomers have delayed selling another year, and new construction will continue to lag because of a builder labor shortage, tighter government regulation and a broken supply chain due to COVID.
- Second homes. The secondary housing markets at the mountains and beaches will continue to enjoy a long overdue recovery. With the stock market performing, COVID taught many that an escape home is deserved and affordable, Riley said.
- Interest rates. When it comes to mortgage rates, what goes down ultimately goes up. One of the side effects of the COVID stimulus could be an interest rate hike, potentially as early as mid-2021. This rate hike will initially get buyers off the fence, but Riley said that inventory is the ongoing issue.
“The world has changed and we have changed to keep our clients and agents safe. But what hasn’t changed is our commitment to helping you through your entire homeownership journey. We’re ready to help you – and we’re ready for 2021,” Riley said.
Carolinas Market Update is targeted to consumers in the Charlotte, Triad, Research Triangle, High Country, and Upstate S.C. regions. It is produced every other month by the Allen Tate Companies and features information, statistics, trends, and predictions about the real estate market in North and South Carolina.
