Predictions for 2021

I’ve been giving 2021 a lot of thought as we wrap up a very challenging 2020. How is it going to play out? What will happen with a new administration, when will we get Covid under control, and what happens after that? So I’ve decided to write them down and see what I get right and where I miss. Feel free to play along!

We’ll start to see significant economic tailwinds in the second half of 2021. The first part of the new year will look a lot like 2020. People will still be isolating, covid will be circulating, and the threat of the new variant will be a challenge that the country will have to overcome. But things will improve dramatically as the population gets vaccinated. 

We’ll see at least one more round of stimulus. Its going to be a while before we reach effective vaccination rates and the federal government is going to step in and have one more round of stimulus. The new administration will request it and there is always a honeymoon period with a new presidential administration.

I think the federal government is going to take control of rolling out the vaccine and we’ll start to see serious momentum around the number of people getting vaccinated. States have not been distributing it effectively and the federal government has a lot more resources at their disposal with which to get the populous their shots.

While we’re on the subject of the federal government, I think we’re going to see more of the same gridlock and difficulty in getting anything significant done no matter what happens with the run off elections in Georgia. The founding fathers structured the federal government purposely to move slowly and deliberately. The new administration is not going to be able to create any sweeping policy changes.

The housing market, especially in the suburbs, is going to continue to be white hot. Low interest rates and demographic trends (millennials are entering their prime earning and child rearing years) will conspire to motivate people to buy houses in the suburbs.

Leisure travel will make a comeback. The entire world is going to go away for the holidays in 2021. The vaccine will be widely distributed and people will be dying for an excuse to do something special for the new year.

Large cities are going to struggle to regain the momentum they had pre-pandemic. Major cities on the east and west coast depend on robust mass transportation systems to get people in and out and around. Budget cuts have reduced their services and it will take some time to get them back. Newer cities in the midwest and the south are better positioned as they are less reliant on mass transportation, but they are going to struggle under the weight of their newfound attractiveness. 

I think there’s a risk of a continued “K-Shaped” recovery. Plenty of people will continue to struggle financially. Hopefully coming out of our houses reminds us to be compassionate and empathetic towards those less fortunate.

Best wishes for a healthy and prosperous 2021!

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