Nothing about 2020 has been normal, so why should the real estate market be any different as we head into pandemic winter? Everything you think you know about how the housing market works has been turned upside down.
In most other years, winter has been a good time to be a buyer. Listings that come on the market are usually greeted with lower buyer demand, while homes that remain on the market have the stigma of not having been snapped up during the busy fall season. Inventory customarily rises a bit because of this decreased demand. Interest rates usually tick down once the busy season has passed.
Forget all that this year.
Spring 2020, which was shaping up to be the busiest housing market of the year, just didn’t happen because of the quarantine and stay-at-home orders, and the economic reaction to them. That pent up demand started loosening in the early summer and has steadily fed the market through the rest of the year. Interest rates fell during this surge, and may begin to rise in the New Year. Housing prices increased as a result of this demand, coming at a time when inventory reached new lows because many sellers were nervous about inviting strangers into their living spaces.
Even living space preferences have changed with amazing speed. Open floor plans are less attractive now that one or both adults need office space with a door, and children are schooling from home.
Commute? To what? Suburbs and even rural areas are seeing increased activity because in a remote workplace environment, proximity to the workplace isn’t as essential as it was a year ago. People want more space and more physical isolation as insulation from the COVID virus. But… they also want good internet access.
From all indications, employers are likely to cut back on the size of their expensive office suites and continue to require white-collar employees to work from home for at least a few days a week, even after the pandemic comes to an end.
Online value data aggregators, like Zillow, don’t yet have the data archive to give buyers or sellers an accurate idea of just how these sudden new trends impact house values. Their algorithm will be even less accurate than it was in 2019 as we head into 2021. Your best source for up-to-date information is your trusted Realtor, me!
Happy Holidays, and a I wish all of you a healthy, virus-free New Year!!