Here’s a look at the big picture of what happened in our 2020 market.
At 0:27 in the video above, you can see how the “V”-type recovery that was projected by major financial institutions (Goldman Sachs, JP Morgan, and Morgan Stanley) back in April turned out to be highly accurate; the actual GDP numbers did, in fact, increase rapidly in the second quarter. While the threat of COVID-19 hasn’t gone away, we are nevertheless seeing some improvements in the economy, which is good news for the housing market.
Mortgage forbearance has been a hot topic since the spring, as there were fears that many homeowners still wouldn’t be able to pay their mortgages once their forbearance periods ended. Experts predicted that the number of Americans filing for a forbearance would hit 30%, making the specter of a foreclosure crisis all the more terrifying. Thankfully, however, the real percentage of homeowners in forbearance never even got close to that figure; as you can see in the graph at 1:15, it steadily dropped from 8.47% in May to just 5.83% in October.
We’re still low on inventory here in the Boston area, which is reflective of the national housing market. Zillow recently surveyed homeowners to find out why they’re not putting their property on the market, and the results were interesting:
- 31% cited “financial uncertainty” as the main inhibitor
- 34% felt their “life is too uncertain right now”
- 25% reported “COVID-19 health concerns” were keeping them on the sidelines
A lot of would-be sellers don’t want strangers coming in and out of their house during a pandemic, and that’s more than fair. We at the Chris Remmes Group pride ourselves on prioritizing safety and working with clients on an individual basis to find solutions that put them at ease and advance their real estate goals. We follow CDC guidelines, wear masks and gloves, sanitize regularly, and socially distance during our “no-contact” showings.
Whatever reason homeowners have for not entering the market, the effect is the same: inventory continues to decline. Most experts predict significant price appreciation in 2021 because low interest rates will continue to fuel demand, which, in turn, will continue to outpace supply. Zillow predicts a 7% increase in home prices, while the National Association of Realtors is sticking with a more modest 4.7%. If you’re looking for more space, it may be in your best interest to trade up now; though rates will remain low next year, home prices will just keep rising on you.
I hope you found this 2020 recap insightful. If you have any questions or know someone who’s looking to buy or sell, I’d be happy to help. Just give me a call or send an email anytime; I’m here to be your real estate resource!