We all expected the unexpected when it came to the real estate market in 2020, it was anyone's guess how the housing market would fare. The effect of a global pandemic on markets in the digital age had consequences that are completely unforeseeable, and the boom in the housing market is one of them. Many of our contemporaries and housing economists predicted changes across the board, but few predicted the strength of the market, especially the demand for homes. We have not seen the demand of this magnitude since 2006.
As we are witnessing markets gain more stability with mass vaccines and the reopening of economies, the housing predictions are becoming more cohesive. The second half of 2020 witnessed a veritable boom in real estate, according to NAR, and it appears that the trends in the end of 2020 will continue with a few new elements to take into account. We are sharing key findings reported by Barrons Financial Magazine, click here for full article, and we are also sharing what our experience has been the past year.
Prediction 1 Condos will Make a Comeback
According to data from NAR, existing home sales reach an adjusted annual rate of 6.69 million, which was an increase of .6% from December's rate and they are up 23.7% from January 2019. This is the highest since April 2006. 89% of sales were single family homes, however condos and co-ops increased 4.1% month over month and 28.8% year on year compared with homes that were .2% month on month and 23% year on year. There is a clear preference in sales for single family homes, but the condo market is coming back.
In The Triangle, we are seeing lots of new developments announced that are condo or townhome in areas of particular growth such as Briar Chapel, Pittsboro, and Downtown Durham, potentially as a result of the continued boom in technology in the area. Further, we have had more interest in those looking to downsize by moving into 55+ communities and selling their single family homes, at a hefty profit, taking advantage of the market. If you are considering downsizing, we specialize in continuum living in The Triangle, click here for more information
Prediction 2 Luxury Leads the Way
While single family home sales jumped, the price points painted a clear picture and luxury homes were moving the most. Homes between $250,000 and $500,000 comprise only 40% of the homes sold. More affordable homes shrank and homes over $1 million grew 77%. Some of the reasons for luxury and a greater investment in the home is more time spent in the home, the flux of buyers out of more densely populated cities, and the desire for more usable space in a home and amenities. If you are looking for luxury home options in Durham, Chapel Hill, or Cary, searches are linked.
Prediction 3 Steady and Low Supply of Homes
Homes are simply not on the market right now. The supply is at 1.9 months, down from 3.1 months the same time last year. This means that every house on the market should sell in 1.9 months. Housing demand is showing no sign of slowing and new home builders are contending
with higher costs of labor and materials, making new home construction a slow start, according to the National Association of Home Builders. This means there is no end in sight to inventory shortages. In The Triangle, our proximity to new home developers and custom builders afford us the latest information on the best projects in the area. We have a nice variety of housing options from single family, to condo, to townhome to choose from, click here for our guide.
Prediction 4 Mortgage Rate Increases
As of early January, mortgage rates began increasing from all time lows, that really encouraged buyers in the second half of 2020. According to Freddie Mac, buyers should not expect rates to drop. Chief NAR economist stated that “It is inevitable that, in the upcoming months, mortgage rates will be rising.” Some of the factors include greater economic stimulus or improving economic prospects that contribute to a rising 10-year Treasury yield.Yun predicts that they will reach a still low 3% by mid 2021. This still makes it a good time to finance, just be aware of there being more red tape to acquiring mortgages, see our financing guide here.
Higher mortgage rates, low supply of homes, condos on the rise, and luxury demand are all important predictions for Raleigh Durham and Chapel Hill real estate markets. We have steady job growth, high quality of living, low population density, and incredible schools that have made it even more desirable the past year. If you are considering selling your home and downsizing, we cannot stress enough the importance of getting your home on the market. Whether you are considering active living or if you are relocating to something bigger, we have guides to buy a new construction luxury condo or townhome and active living.
If you're interested in buying or selling a home in the Research Triangle area contact My NC Homes, and get a true experienced professional on your side. Send us amessage or give us a call at 919-451-7868.
With 50 years combined experience, you are in excellent hands, regardless of market conditions and we offer honest real estate expertise and guidance.Posted by Larry Tollen on