To say that 2020 has been a year of surprises would be quite the understatement! Looking back on the year, the economy was soaring at record levels for the months of January and February. Then enters a worldwide pandemic, followed by nationwide lockdowns during March, April, & May. In what seemed like the switch of a button, the U.S. (& much of the world) went from a booming economy to a self-induced path to recession. Needless to say, this has been devastating for many businesses throughout the country and the world. Interestingly, the real estate market was forced to pause during the shutdown but has seemingly come roaring back!
A look at the 2020 real estate market
Not only has the real estate market been a bright spot for the U.S. economy in 2020, it has actually exceeded expectations this year. Of course, a leading indicator of the housing market is always home sales. Compared to 2019, we are currently 20% higher than we were last September in home sales. Strong demand from buyers looking for more space combined with historically low interest rates have bolstered the housing market throughout this unique year.
At this time, the experts predict that we should finish 2020 with a 20% growth in new-home sales, as well as a 3% overall increase in existing-home sales.
What does 2021 look like?
National Association of Realtors Chief Economist Lawrence Yun, predicts that new-home sales will jump 21% and existing-home sales will increase at least 9%. In terms of housing trends, Yun foresees “the second-order housing demand from remote work flexibility and changing housing preference will continue next year.”
As for mortgage rates, Yun predicts that they should hold relatively low. This should still foster a low-cost lending opportunity for many prospective buyers. Lastly, the expectation is for home prices to increase by 6% by the end of the year with an additional 3% increase in 2021.
Summary
In closing, it is safe to say that the real estate market has been a pleasant surprise in 2020. In South Florida, the tropical climate combined with the favorable tax environment (relative to many other states) has long attracted many new residents. Factor in a worldwide pandemic that has opened the door to work remotely for many Americans, and now we have seen a new segment of the population transplanting to South Florida. If you are thinking of buying or selling real estate in South Florida, we can help! Contact Live South Florida Realty, Inc. today!
