Concord, CA Real Estate Forecast for 2021: Buyers Competing for Short Supply

The Concord, California real estate market has performed surprisingly well during 2020, despite the ongoing challenges associated with the coronavirus pandemic.

Now, as we approach the last two months of the year, we are seeing some positive forecasts for the Concord, CA housing market into 2021 as well. The same is true for other cities across Contra Costa County. Home prices are expected to continue rising through this year and into next, according to analysts.

This is not surprising, when you consider the current supply-and-demand situation in the county. The short version is that the number of home buyers in the market exceeds the number of properties available. And that puts upward pressure on home prices.

In fact, a housing supply shortage is arguably the top factor driving current trends and forecasts for the Concord, California housing market. We’ll get to those predictions in a moment. But first, let’s take a quick look at current real estate trends in the area.

Related report: Walnut Creek housing outlook

Concord Home Prices Climbing Steadily in 2020

In many ways, the Bay Area real estate market is the one bright spot of the regional economy. While unemployment remains elevated due to COVID-related restrictions, the housing market in Concord and across the region continues to chug along at a steady pace.

In fact, if you only looked at real estate trends, you wouldn’t even know there was a pandemic and recession happening.

The Concord, CA housing market is a prime example of this. Home prices in this market rose steadily through most of 2020, despite the stumbling blocks seen in other aspects of the economy. Sales have climbed as well, when measured year over year.

As of October 2020, the typical home in Concord was selling for around $650,000. According to the real estate data company Zillow, home values in the city have risen by around 7% over the past year or so.

The broader Contra Costa County real estate market is also seeing positive trends where prices are concerned. An October report from the California Association of Realtors (C.A.R.) showed that the median selling price for existing single-family homes in the county rose 19% in September 2020, compared to a year earlier.

Housing Market Forecast Extending into 2021

The housing research team at Zillow recently predicted that home values within the Concord, CA housing market would continue rising for the foreseeable future. This is largely due to an imbalance between supply and demand, which is affecting the whole Bay Area and much of California.

The company’s forecast for the Concord real estate market said they predict home values will “rise 8.5% in the next year.” That statement was issued in October 2020, which means that it extends into the fall of 2021.

It seems counterintuitive that house values would continue to climb straight through a pandemic and economic recession. But that’s exactly what is happening, within the Concord housing market and elsewhere across the U.S.

There are several reasons for the real estate market’s surprising strength:

• Mortgage rates are still incredibly low, which motivates buyers.
• The housing market was strong and stable going into the pandemic.
• There aren’t enough homes for sale to meet demand.

Bay Area Home Sales Surge in 2020

According to the October C.A.R. report mentioned earlier, home sales in Concord and elsewhere in Contra Costa County have risen sharply during 2020. That’s an understatement, actually.

To quote that October 2020 report:

[Home] sales increased in all major regions from last year in the high double-digits. The Central Coast and the San Francisco Bay Area had the strongest sales growth in September with both regions surging 42 percent and 34.2 percent, respectively.

Mortgage rates have something to do with this. The average rate for a 30-year fixed mortgage loan dropped to (another) record low last week, sinking to an incredibly low 2.81%. That’s based on the weekly industry survey conducted by Freddie Mac.

Tight Inventory Has Led to Bidding Wars

Strong home-buying demand and a reported shift from urban to suburban areas has led to increased competition in housing markets like Concord, California. It has also reduced inventory, making it harder for buyers to find the right home at the right price.

According to the California Association of Realtors, the inventory of homes for sale in Contra Costa County dropped to a 1.5-month supply in September of 2020. (Note the all-important decimal there.) That’s miles below what is considered to be a balanced market.

According to a recent article in The Mercury News:

Bay Area [real estate] agents say demand is driven by techies and professionals looking for more space for family and home office Zoom-rooms … single family homes in the suburbs of Contra Costa and Alameda counties have been atop many wish lists. Fewer homes for sale has meant fierce bidding wars in the East Bay.

It’s hard to imagine real estate bidding wars during an economic downturn and ongoing health crisis. But that is what’s happening in many cities across the Bay Area. It’s a supply and demand story — there’s a shortage of the former and plenty of the latter. And that puts upward pressure on home values.

This imbalance is a major factor in the positive home-value forecast for the Concord, CA real estate market. With demand far outpacing supply, we will likely see continued price growth well into 2021.

Advice for Buyers in Concord, California

Are you planning to buy a home in Concord, California sometime during 2021? Here are some quick tips to help you navigate the local housing scene:

• Start your search early, to account for high competition from other buyers.
• Have your finances lined up ahead of time, as much as possible.
• Make a strong first offer backed up by recent sales data or “comps.”
• Be willing to compromise when it comes to size, features and location.

You might also want to consider making your purchase sooner rather than later. With prices rising the way they are, you could end up paying more the longer you wait. There’s also a chance today’s record-low mortgage rates will inch upward over the coming months.

Related: A good time to buy in the Bay Area?

Disclaimer: This article includes real estate market predictions for Concord, California stretching into 2021. Those forecasts were issued by third parties not associated with our company.