Well 2020 certainly was a doozy! As with most of life’s situations, we learned a lot and have seen a shift in the housing market in more ways than one. And, some of the changes in the real estate industry and housing trends are here to stay. Here’s a recap on how the market changed during the COVID19 pandemic and what we can take away from the year. I’ll also include some trends that we’ll see in 2021.

The Beginning
When we started 2020, the experts were indicating that the housing market was long overdue for a market correction. As the pandemic rattled our country, and the world, everyone in the housing industry was waiting at the edge of their seats to see how the market would react to stay at home orders. In many parts of the country, the real estate market was not deemed an essential service and completely came to halt overnight. Luckily, in NJ, we were able to continue with real estate transactions.

Despite our ability to keep working, buyers and sellers alike retreated initially. It didn’t take long for buyers to come back out, in full force, looking to buy a home. We were already experiencing a drought in available inventory and the pandemic only amplified those challenges. More and more sellers pulled their homes off the market or halted showing, and some sellers who would have come on the market in the spring, decided not to sell.

How the market changed
A few things that came about as a result of the pandemic include shifting desires in home features and location, more DIY projects, technology overhauls in the home buying and selling process, and stricter lending practices. The most debated topic is whether or not people fled the cities in a mass exodus. That last one is still up for debate and you can find people who will defend both angles people fled the city to get away from crowds and others who say, most people actually couldn’t afford to leave where they were and have stayed.

Lastly, some of the biggest winners in this real estate market were sellers. Home sellers who were still willing to show their homes in person or virtually were able to take advantage of the extremely competitive market. Some sellers were lucky to receive multiple offers within just a few days of listing their home and were even able to get asking price and in many cases, over asking price. More on where the housing market stands for 2021, later.

The Stats of 2020
Absorption rate (how many months it would take to sell all the inventory on the market) is normally roughly 5 months, during most months in during the pandemic, this number was below 3 months
Said differently, our housing inventory was over 30% compared to 2019
Record low interest rates; as of Dec 2020, a 30year fixed mortgage was at 2.67% (for borrowers with excellent credit)
Jan 2020 median sale price was 266,200 and in Sept 2020, it was 311,800; an increase of more than 15%

New Jersey Stats
Despite low inventory, New Jersey saw a strong housing market in 2020. Here are a few of the stats in the Garden State.
Pending sales increased 37% in Q3 from 2019
Closed sales up 11% in Q3 from 2019
Price increase of 14% in Q3 from 2019
Inventory decreased 39%
Percent price received rose to 99.1%, from 97.8% in 2019
Year over year sales continue to rise
November median home price was 375K compared to 310K in 2019

2021 Trends and Predictions
What will happen this year depends greatly on the overall economy, after all, our housing market is directly related. Available inventory and interest rates will certainly play a role in what happened in the real estate market this year. Affordability and possibly future foreclosures may play a role in bringing the housing market back down to reality. Buyers are still in a great position to buy with interest rates still under 3%, borrowed money has never been cheaper so despite home prices rising, it is still a great time for a homebuyer to be on the hunt for their next home. And sellers remain in a great position to sell as competition remains strong and we begin to enter, believe it or not, the spring housing market. If you are considering selling, reach out to me today for a free home evaluation.

Buying and selling a home in 2020 changed real estate practices indefinitely and will serve to ultimately benefit consumers in a positive way. And, this is a great thing. As a realtor in Monmouth and Ocean Counties, New Jersey, I work tirelessly to create a smooth and successful transaction for my clients. This past year has been a challenge for us all and I am grateful for the opportunity to help buyers and sellers navigate the process of selling or buying a home. We all pivoted in the last ten months and the real estate industry is stronger than ever right now. Reach out to me today for a free consultation to discuss your home purchase or sale plans. Cheers to 2021 and I look forward to helping you on this beautiful journey!