A Reflection on How the Unprecedented Events of 2020 Changed Our Real Estate Market
If someone told us in 2019 what was to happen the following year, we would not have believed them. From second graders learning through Zoom to one-way arrows in supermarket aisles, all aspects of our everyday lives have been impacted. The lockdowns in early spring especially affected those in the service industry. Restaurants relied on curbside pick up and hotels adopted new cleaning processes and precautions.
The real estate industry was no different. Masks, gloves, and sometimes shoe coverings became a requirement during home tours. Virtual consultations replaced coffee shop meetings and closings moved outdoors. How the pandemic affected the real estate market and buyer trends made residential real estate one of the most interesting industries to watch in 2020.
The national lockdown in the US began around mid-March. Springtime is usually the busiest time of the year for real estate, but this year it was the total opposite. Sellers cautiously took their homes off the market to prevent the spread of unfamiliar Coronavirus. For around 5 weeks, the phones in real estate offices were quiet.
As restrictions slowly lifted, a few sellers decided to put their home back onto the market. Meanwhile, buyer demand increased exponentially. There were a few reasons for this.
One reason is that the lockdown had residents stuck inside for an unusually prolonged amount of time. Claustrophobia and the nagging realization of needing more space brought people to the decision to look for more square footage. It is also safe to say that working remotely also had an impact on this way of thinking. According to Zillow, a dedicated office space is homebuyers’ #1 must-have feature in their new home.
The second reason for skyrocketing buyer demand was the historically low interested rates. So far, interest rates have hit a historical low 15 times and are currently hovering around 2.67% for a 30-year fix-rate mortgage. Low-interest rates allow homebuyers to qualify for a larger loan making the present time an amazing time to buy.
In Tampa specifically, we saw immense buyer demand from relocations. For one, Florida’s lighter Covid restrictions attracted out-of-state residents. Also, many people were allured to Tampa Bay for the weather. The ability to comfortably go outside during the winter months allured many people from New York, Connecticut, New Jersey, Washington DC, and more.
It’s important to note that sellers also had a boost this past year. Due to inventory staying low, homes in Tampa were going under contract within a week. The median price home price increased by almost 20% from last year. Bidding wars are a common occurrence and sellers often receive offers for thousands over the asking price.
It is safe to say this year has been like no other in real estate. Tampa Bay was one of the cities that saw a huge boost in residential real estate. The city and outer suburbs continue to grow. New construction communities in Wesley Chapel, Land O Lakes, and Riverview have been extremely busy as people seek extra space and resort-style amenities.
Economists remain positive for what is to come in 2021. According to the Nation Association of Realtors, mortgage rates will remain low and housing inventory will increase with the release of vaccines. Improved job conditions and buyers that were unable to purchase in 2020 will keep demand steady.