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This year already gained the title of “a year like no other,” but Zillow says 2021’s housing market will blow 2020 out of the water. As housing trends accelerated through this year, there were limitations from the pandemic holding the market back, such as sellers reluctant to list. Zillow predicts sales will see a 21.9% annual growth in 2021 due to the upcoming economic recovery amid vaccination news. And unlike this year, Zillow expects a city living surge in 2021, citing research that found suburban markets retained a slight edge over urban markets, but cities were very much alive.
Competition for housing was fierce across the board in 2020, with days to pending, list prices and the share of homes selling above list price all rising at a steady clip in both urban and suburban areas.
In 2021, those that may have left cities temporarily during the pandemic will likely return as a vaccine becomes more widely available and local economies begin to open up again. Young adults moved back in with their parents at much higher rates this year than last, with nearly 2 million 18 to 25 years old still living at home in August. The majority of this age cohort tend to be renters and 46% of Gen Z renters tend to rent in urban areas, suggesting that when young people are ready to strike out again they will return to amenity-rich cities.
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