The current pandemic has had a huge negative effect on businesses around the world, and the California real estate market was no exception.

The social distancing rules affected the supply side of the market, with homeowners unwilling to list their homes and other housing projects postponed in order to curtail the spread of the virus.

April 2020 was a particularly bad period for this segment of the market. Sales plummeted as buyers stopped making purchases even for the very few properties available. The situation was so dire, that industry experts feared that the market would crash.¹

Since then, however, real estate trading has picked up tremendously, especially in the big cities of Los Angeles, San Francisco, Sacramento, San Diego, and San Jose.

The market trends show a positive position for the industry players, even with the recent wildfires and the concluded presidential elections

2021 California Real Estate Market Predictions

The Market Will Not Crash in 2021

If you are planning not to invest in the California real estate market for fears that it will crash in 2021, this is good news for you.

Experts predict that the market will continue its recovery through the year, and the demand for houses will continue to rise.

There Will Be A Gradual Increase In Inventory

2020 has seen a drop in the inventory available for sale, especially since September.

The turn of the year will however lead to a slow increase in the houses for sale, although not at a large enough rate to meet the growing demand.

It Will Remain A Seller’s Market

Sellers will continue to have control of the market in 2021 as there will be a shortage of units to sell and increased demand in the market.

The low mortgage rates are likely to continue to encourage buyers to enter the market at a higher rate than the homeowners will be willing to list their houses.

Higher Property Prices

As with any seller controlled market, the prices paid for property units in 2021 are expected to increase.

The imbalance in the market forces is expected to be a huge factor in setting the prices, as discussed, demand is expected to increase at a higher rate than supply.

Low Mortgage Rates Will Make Property More Affordable

Players in the market are not worried about the expected increases in price, as the low mortgage rates will keep the houses affordable.

The forecasts predict that the annual average rate will drop to about 2.1% in 2021.²

Home Insurance Rates Will Rise

The recent wildfires will have further negative effects on the real estate market, with experts predicting an increase in the rates charged for home insurance.

A Move To Suburban Towns

If you are looking to invest within the state, experts advise that you look more into properties along suburban towns like Sacramento. Market insiders foresee an urban-to-rural migration in California within 2021, increasing home prices in the towns.

California Housing Market Predictions

The California housing market has had a good year (2020), even with challenges stemming from the Covid-19 pandemic, the Presidential elections, and wildfires in the state. Experts predict a better 2021, especially for homeowners planning to list their houses within the year.

Your property is a huge asset. Talk to one of our expert advisors about the CalPATH Home Loan Program and how you can use your mortgage to increase your savings.


“About Mountain West Financial and the CalPATH Home Loan Program

Mountain West Financial is the exclusive lender offering CalPATH, the #1 home loan program for Teachers, Police Officers, Firefighters, and other public employees who serve our local California communities.

You may contact our CalPATH Hotline @ 800-310-7577, seven days a week from (8:30 am to 8:00 pm). A CalPATH advisor will be standing by to answer (any & all) questions you may have about the home buying or refinance process.

We look forward to working with you soon!


Joe Moore – Branch Manager”


Links to External Sources

  1. How’s the Housing Market Amid Coronavirus Pandemic? –
  2. Fannie Mae sees record-low mortgage rates through 2021 –