Although none of us thought we’d ever be living through a pandemic, here we are. Hopefully this is the first and last pandemic that we experience in our lifetimes. Forced shut downs, social distancing, an increase in e-commerce, and even an increase in pet adoptions were all byproducts of the pandemic. Unfortunately, we also saw a dramatic increase in unemployment despite having one of the best economies on record prior to the arrival of the novel coronavirus in the U.S.
As a matter of fact, unemployment rates in the U.S. rivaled those seen during the The Great Depression. According to the U.S. Bureau of Labor Statistics, peak unemployment rates hit 14.8% in April 2020. This is the highest unemployment rate since the Great Depression in 1933, when rates hit 25%.
A pandemic boom
Whenever a huge market or global even happens, it drives the housing market in one direction or another. As evidenced during the 2008 housing market crash, we saw unemployment rates rise to 10% and nearly 3.2 million properties experienced foreclosures. Although unemployment figures surpassed levels seen during the housing market crash of 2008, many of those that are still employed are able to work remotely. The boom in remote working environments has been arguably the single biggest factor behind the recent housing boom. More and more Americans are asking themselves: “If I can work from anywhere moving forward, where would I prefer to live?” The short answer to this question for many has been states with low tax burdens, such as Florida.
Who are the buyers? What do they want?
So just where are all of these buyers coming from? Who are they and what are they looking for in new homes? Below is the breakdown of home buyers by generation:
- Millennials: 38%
- Generation Xers: 23%
- Young Baby Boomers: 18%
- Older Baby Boomers: 15%
- Silent Generation: 6%
Overall, home buyers have been on the hunt for more space. With an emphasis on social distancing and spending more time at home, a larger home with space for a home office (or even two), and perhaps a home gym has been high on the list of features most sought after. With the commute to work no longer being a factor in the home search for many, this has resulted in endless opportunities for a relocation.
As a result of less restrictions for home searches, buyers have flooded the market. The monthly median sales price of existing homes rose throughout 2020. It started at $266,200 in January and rose to a high of $313,100 in October, according to the National Association of Realtors® (NAR). With continual low mortgage rates, this strong buyer demand is expected to last throughout 2021 and into the foreseeable future.
As we have written about previously, states with low tax burdens that are more open for business have been the benefactors of the pandemic real estate boom. Prior to the pandemic, the state of Florida was already setting records for the numbers of Americans migrating into the state. This figure has now grown substantially as more Americans are opting to work remotely from The Sunshine State.
Whether you are looking for a new primary residence or a second home, South Florida offers everything you need. Are you thinking of buying a property in South Florida? We can help. Contact Live South Florida Realty, Inc. today. You will be glad that you did.