A Look Back and a Look Ahead
2020 y'all. Can we all just take a moment and appreciate the fact that we made it through? I know you all had your share of challenges with the pandemic. From spending more time at home, to uncertainties in the work force, to the dreaded NTI, it was a year. Hopefully you were able to find some good in it as well!
We wanted to take a minute to break down what we experienced in the world of real estate in 2020, as well as look forward to what we anticipate in 2021.
Looking back at 2020
Lack of Inventory
Probably the most notable thing we experienced was a lack of inventory, AKA not a lot of homes for sale. We've had several years of lower than normal inventory, but 2020 took the cake. Low interest rates kept buyers interested, so basic supply and demand coupled with multiple offers often drove prices of houses up.
Lots of our move-up buyers wanted to sell their current homes and buy a new one, but a lot of them were trigger shy because while they could have sold their current homes for top dollar, finding a new home just wasn't as easy.
The real winners were the folks who could purchase a new home and then sell their old home, as they often had the competitive edge.
Some Appraisal Issues
While appraiser's certainly have taken note of the current market conditions and appreciation, we did have times when demand pushed a purchase price up a little too high for their liking and appraisals came back short. While this wasn't overwhelmingly the case, it did happen.
People Spending More Time at Home
Overall in 2020, everyone just spent more time at home. This often put homeowners in one of two camps.
They recognized that their current home did NOT meet their family's needs and the desire for a new home promped them to make a move, or plan for a move in 2021.
They felt like a move would be too complicated, so instead focused their time and energy on making improvements to their current home
New Construction Getting More Expensive
New construction was hot in 2020, but definitely had its fair share of challenges, too. Lumber and other building materials were very volatile, causing pricing to go up. Lot inventory is another challenge driving pricing up
Looking ahead to 2021…
Low Inventory Continues
A month into 2021, and the low inventory continues. We expect some of the same challenges that we faced in 2020 on this front. That's why now more than ever, if you'll be purchasing a home, you'll want to be ultra proactive.
Off Market Deals
Due to the low inventory, we expect the percentage of off market deals to go up. The days of sitting around waiting for a new listing to hit the MLS are behind us. You have to be creative to find opportunities that aren't listed. We often help clients do this by targeting cancelled listings, canvasing neighborhoods of interest, and leveraging our relationships.
New Construction
We've seen spec home inventory also take a hit due to lumber costs. Less inventory of new construction homes has also contributed greatly to the overall housing shortage.
Appraisals
If you factor in new construction costs rising and low existing home inventory, I bet we will start to see some more appraisal issues with values coming in lower than contract prices.
Trends
Demand for certain areas in a home have gone up, namely office spaces & flex rooms. Any space that can be utilized with all of the extra time being spent at home is hot right now.
How to set yourself up for success in 2021
It can be overwhelming to think about 2021 being your year to make a move. But there is opportunity here and it is doable IF you put in the legwork. You have to be proactive to set yourself up for success.
Ways to be Proactive
Start planning NOW.
Get your relationships in place with everyone you need to make your move happen. I'm talking realtor, lender, all of it! Get your research done and have a plan. Know what your current home is worth. Start figuring out logistically how everything will come together.
Don't wait for a listing to pop up, create opportunity.
You can't just sit back and wait, you have to make things happen! Make sure you're working with an agent who will work to find opportunities for you. We mentioned some creative was to do this above.
Be prepared, get all of your ducks in a row.
If you're going to need to sell your current home, get it ready NOW. Get the projects done, get pictures, have it all set. If you'll need a mortgage for your new home, get pre-approved now. Find a local lender now. Don't wait until the second you need it.
If you need help planning a move for 2021, you know where to find us!
