2020 Year End Review
The year 2020 was unprecedented in countless ways. Riots, political upheaval, and a death toll that our country never saw coming. Somehow during a global pandemic, we watched the real estate industry soar. Rates continued to remain at record lows. Real estate agents were considered “essential” and had to conduct business as they normally would-though this was a “new normal.” Let’s cover a few key points that made 2020 a notable year in our industry.
- If you took Econ101 back in the day, you may remember some laws about supply and demand. 2020 was a seller’s market, to say the least. The inventory was so scarce, multiple offers significantly over asking became the other “new normal.” A major consideration to keep in mind is that while supply took a nosedive, buyer demand went thru the roof. What caused this? Let’s explore the contributing factors…
- Though some companies have allowed employees to return to the office, many have made the opposite decision; not only continuing to let employees work from home but have made it permanent. This remote work arrangement has spawned a new way of life-not just work from home but work from anywhere. To that end, this wave of remotely positioned people in the job force led to the relocation segment of housing market to move leaps and bounds, both figuratively and literally. This produced an influx of demand from potential new homeowners who decided if they could WFA, they wanted their home office to meet all their needs and wants. This coupled with interest rates at historic lows made for exponential demand, particularly from that of the first-time home buyer segment.
- A brief synopsis of what is sourcing these record low interest rates is that since the pandemic hasn’t taken its toll on real estate, investors put their money in mortgage bonds which, in turn, causes rates to fall. I remember only a few years ago when an interest rate in the 4s was something to smile about. In December of 2020 we were hovering around 2.71% whereas just 12 months prior we were 3.68%. Needless to say, the state of the market is spoiling home buyers as experts predict rates to go up again in the future. Who is to say what the future holds. If 2020 taught us anything, it is to be grateful for what we have here and now. As for real estate agents, what now may be considered back to business for many is just business as usual for us.
