What Does 2021 Have in Store for Home Values?

Dan May • January 11, 2021

What Does 2021 Have in Store for Home Values?

Three houses are lined up in a row against a blue sky.

According to the latest CoreLogic Home Price Insights Report, nationwide home values increased by 8.2% over the last twelve months. The dramatic rise was brought about as the inventory of homes for sale reached historic lows at the same time buyer demand was buoyed by record-low mortgage rates. As CoreLogic explained:


“Home price growth remained consistently elevated throughout 2020. Home sales for the year are expected to register above 2019 levels. Meanwhile, the availability of for-sale homes has dwindled as demand increased and coronavirus (COVID-19) outbreaks continued across the country, which delayed some sellers from putting their homes on the market. While the pandemic left many in positions of financial insecurity, those who maintained employment and income stability are also incentivized to buy given the record-low mortgage rates available; this is increasing buyer demand while for-sale inventory is in short supply.”

Where will home values go in 2021?

Home price appreciation in 2021 will continue to be determined by this imbalance of supply and demand. If supply remains low and demand is high, prices will continue to increase.


Housing Supply


According to the National Association of Realtors (NAR), the current number of single-family homes for sale is 1,080,000. At the same time last year, that number stood at 1,450,000. We are entering 2021 with approximately 270,000 fewer homes for sale than there were one year ago.

However, there is some speculation that the inventory crush will ease somewhat as we move through the new year for two reasons:

1. As the health crisis eases, more homeowners will be comfortable putting their houses on the market.

2. Some households impacted financially by the pandemic will be forced to sell.


Housing Demand

Low mortgage rates have driven buyer demand over the last twelve months. According to Freddie Mac, rates stood at 3.72% at the beginning of 2020. Today, we’re starting 2021 with rates one full percentage point lower than that. Low rates create a great opportunity for homebuyers, which is one reason why demand is expected to remain high throughout the new year.

Taking into consideration these projections on housing supply and demand, real estate analysts forecast homes will continue to appreciate in 2021, but that appreciation may be at a steadier pace than last year. Here are their forecasts:


A graph showing the average home price appreciation forecasts for the year 2021.

Bottom Line


There’s still a very limited number of homes for sale for the great number of purchasers looking to buy them. As a result, the concept of “supply and demand” mandates that home values in the country will continue to appreciate.


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They’re evaluating neighborhoods not only on price, but on how well the area supports the way they want to live. Common priorities we see from today’s Westside buyers: Move-in ready homes with functional layouts and updated systems. Outdoor living potential, whether that means a yard, patio, or space for entertaining. Energy-efficient upgrades, from newer windows and insulation to solar and EV-ready garages. Proximity to schools, parks, transit, and services, especially for households that want to reduce commute and car time. Westside neighborhoods align well with these priorities, which is why demand has remained strong and competitive—particularly in Beverlywood, Castle Heights, and Cheviot Hills. ________________________________________ Long-Term Value and Market Stability Even when the broader Los Angeles market experiences ups and downs, the Westside has a history of holding its value. These neighborhoods benefit from: Consistently low inventory – There are only so many homes in these pockets, and people tend to stay for a long time. Steady appreciation over time, driven by location, schools, and lifestyle appeal. Deep community roots, with many residents invested in maintaining the character, safety, and livability of their blocks. Homes here are often purchased for the lifestyle — but kept for decades because of the balance they offer between convenience, comfort, and long-term equity. ________________________________________ Why Work with the Dan May Real Estate Team? Buying or selling on the Westside is about more than just price per square foot. It’s about understanding micro-neighborhoods, school boundaries, local traffic patterns, and where buyers are focusing their attention right now. The Dan May Real Estate Team brings: Hyper-local experience in Beverlywood, Castle Heights, Cheviot Hills, and surrounding areas. 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