Davidson Realty, Inc.

How COVID-19 Impacted Real Estate in 2020

January 15, 2021

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Posted by in News, Northeast Florida Market Trends

The resilience of the real estate market was perhaps the biggest surprise in 2020. Despite the COVID-19 pandemic, the loss of millions of jobs, and a crippled economy, millions of American’s made waves in the real estate industry by browsing and, oftentimes, purchasing a new home. With thousands of businesses negatively affected by the COVID-19 pandemic, the real estate market saw positive trends and record-setting numbers.

 

The 2020 real estate market was expected to see steady growth. Lawrence Yun, National Association of Realtors (NAR) Chief Economist predicted there to be more than 750,000, for an 11% increase, in new home sales while existing homes sales would be repressed by low supply of homes to more than 5.56 million for a modest 4% increase. The median home price was anticipated to land at  $270,400 for an increase of 4.3%. Overall, the NAR was forecasting a healthy year for real estate. 

 

At the end of the first quarter of 2020, in the infancy of the pandemic, the real estate market was merely reacting to the sudden, bizarre changes that were happening in the world. With the new phrase called “social distancing” added to American vocabulary, all players in the real estate industry were in uncharted waters. With schools closing and businesses shut down, the needs of home seekers shifted.  

 

The COVID-19 pandemic made an interesting impact on the real estate market. While inventory was low and homes were selling quickly, the NAR reported a surge of people moving to more rural areas from larger, more crowded cities while desiring more moderate climates. “We are seeing many buyers coming from the Midwest, Northeast, and South Florida,” shares Sherry Davidson, President of Davidson Realty. This shift was caused by multiple COVID-19 related effects. Offices started allowing employees to work exclusively from home to successfully socially distance and people were enjoying the new routine COVID-19 brought and desired a slower pace of life. 

 

Throughout the changing times, Davidson Realty was able to adjust to new safety procedures and listen to the new needs of their clients. “Buyers were looking for homes that were more in tune to the daily needs of their families. Many were working from home and homeschooling their children, requiring more functional space for work and play,” shares Sherry Davidson. “Families were eager to purchase a home, but with inventory at record lows, we were seeing multiple offer situations and buyers were paying more than appraised values. Sellers were in a position to not consider offers with contingencies for financing and appraisals.” With interest rates at record-setting lows, buyers were eager to get their hands on their dream home. 

 

Although NAR has not yet released their year-end sales report, NAR reported in December they were expecting to reach 5.52 million in purchases in 2020, which is the highest annual mark since 2006. They also anticipate the median home price will hit a record-setting high at $293,000. Lawrence Yun has stated that the momentum from the second half of 2020 will carry into 2021.  Yun foresees interest rates remaining favorable and an increase in supply which will give home buyers more choices and repress home price growth. 

 

It’s safe to say the real estate market is still on fire. If you are interested in buying or selling your home, contact Davidson Realty today at (904) 940-5000. 

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Real Estate Market Update

December 23, 2020

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Posted by in News, Northeast Florida Market Trends

“God has given us two hands – one to receive with and the other to give with. We are not cisterns made for hoarding; we are channels made for sharing.” Billy Graham

 

The Northeast Florida Association of Realtors market stats continue to show more buyer demand than seller supply. Pending sales were below normal in March, April, and May due to COVID-19; however, the year to date pending sales are up 11.6% over the same period last year. The 2,858 pending sales in November is 21.3% higher than last November.

 

The 2,680 closings in November are 13% higher than last November. We are up 6.7% year-to-date over the same period last year.

 

The homes available for sale is the lowest number on any reports I have seen. There are 5,211 homes available in Northeast Florida down 44.7% from 9,418 in November 2019 and 9,976 in November 2018.

 

There is 1.7 months supply of homes for sale which is down 51.4% from last year. A balanced market is 5 to 6 months of inventory.

 

The Northeast Florida builders are building more homes than in any year since 2005. There have been 11,343 permits issued in the Jacksonville MSA through November. That is 18% higher than 2019 in the same period. There were 10,345 permits in all 12 months of 2019.

 

The low supply and increased demand is causing prices to continue to rise. The median sales price of $262,000 is 12.9% higher than last November and we are up 8.8% year-to-date. The average sales price of $317,602 is 17.2% higher than last November and we are up 11.5% year-to-date.

 

Realtor.com has issued the first predictions for 2021. They are predicting a 7% growth in sales nationally and a 5.7% price increase. The 2021 prediction for the Jacksonville area is 9.4% growth in sales and 5.0% increase in prices.

 

Realtor.com is predicting more homes will hit the market in 2021, but buyers will struggle with affordability as home prices continue to rise. Mortgage rates will slowly rise toward 3.4%.

 

· Millennials will continue to drive the market. Older millennials will likely be trade-up buyers while the younger segment of the generation age into their key home-buying years.

· Affordability will become a growing obstacle.

· Inventory will begin the slow road toward recovery.

· Suburbs will shine if remote work stays around.

 

I wish you a wonderful holiday season and an amazing 2021. This year was full of ups and downs with COVID and the election. I wish you a wonderful and safe New Year!

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Real Estate Market Update

November 30, 2020

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Posted by in News, Northeast Florida Market Trends

“It is not joy that makes us grateful; it is gratitude that makes us joyful.” David Steindl-Rast

 

I am very grateful to everyone that supported the 2020 Davidson Cares Clay Day! Thanks to your generosity we raised over $40,000 to be split evenly between Builders Care, St. Augustine Youth Services and Investing in Kids.

 

The Northeast Florida Multiple Listing Service shows continued buyer demand and low supply. There were 3,192 closed sales in October which is 24.5% more than the 2,564 last October. The spring buying season got delayed, but we are up 5.6% for year-to-date closings over last year.

 

Pending sales of 3,153 are 18.4% more than the 2,663 pending sales last October. We are up 10.2% year-to-date.

 

There are 6,109 active listings which is down 34.5% from the 9,332 last October.

 

The National Association of Realtors (NAR) 2020 Buyer/Seller Survey has some interesting findings. “The coronavirus, without a doubt, led homebuyers to reassess their housing situations and even reconsider home sizes and destinations,” says Jessica Lautz, vice president of demographics and behavioral insights for NAR. “Buyers sought housing with more rooms, more square footage and more yard space, and they may have desired a home office or home gym. They also shopped for larger homes because extra space would allow households to better accommodate older adult relatives or young adults that are now living within the residence.”

 

The 7 Buyer pandemic-related trends:

  1. Multigenerational homes grow in popularity
  2. Homes are pricier
  3. Shorter house tenures expected
  4. More renters become owners
  5. Buyers love suburbia
  6. Searches speed up
  7. Certain buying segments grow

The 7 Seller pandemic-related trends:

  1. Looking to upsize
  2. Feeling urgency
  3. Technology’s importance grows
  4. Incentives haven’t disappeared
  5. Equity gains
  6. Long-timers appear more motivated to move
  7. Desire to live close to family remains strong

It will be interesting to see future housing trends. For now, we are seeing multiple offers on listings and many potential sellers are on the sidelines.

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HOW COVID IS AFFECTING THE REAL ESTATE MARKET

October 21, 2020

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Posted by in Neighborhoods, News, Northeast Florida Market Trends

For nearly three decades, Mike and Felicia created memories and raised five children in their colonial home in Beverly, MA. With every passing winter and as it turned into spring, the Waldrons would begin to daydream about what life would be like living in the Sunshine State. As their two youngest children “flew the coup” as they say, and headed off to college, the Waldrons, looked around their 3,500 square foot home filled with years of memories and felt confident it was the right time to pack up, downsize and head south. “We wanted to move near my parents and my sister and her family who live in Bradenton,” shared Felicia Waldron, “We were ready to escape the hard winter weather of the northeast and the higher cost of living.”

 

The research began and the Waldrons landed on a move to Northeast Florida. Like most who relocate here, they appreciated the friendly and welcoming community, the weather which includes some cooler temperatures during the winter months, and of course, the close proximity to the beach. “As we were touring a home in World Golf Village, we happened to meet Mirtha Barzaga, a Davidson Realty Agent,” Felicia said, “We stayed in contact with Mirtha while we prepared our home in Beverly for market, then listed during COVID.”

 

The COVID-19 pandemic has had an interesting impact on the real estate market. While inventory is low and homes are selling quickly in most markets, the National Association of Realtors is reporting an influx of people moving to more rural areas from larger cities and moving south for a more moderate climate. These often cross-country moves are a result of a few reasons all COVID related: corporate offices have allowed employees to work from home as a measure to help stop the spread of the virus, homeowners living in congested areas are seeking rural life where COVID cases are typically significantly lower, and families have reprioritized and are looking for a slower pace of life.

 

While the Waldrons were searching St. Johns County for their new and perfect home, they were concerned about each passing day their home in Beverly sat on the market. “It took us more than four months to sell our Beverly house because COVID was ramping up and things were pretty closed down in MA,” Felicia explained, “Mirtha sent us uplifting notes and emails as we were becoming more dejected wondering if our dream of moving to Florida was ever going to come to fruition.”

 

During the early months of the pandemic, the Waldrons found themselves packing up and moving across the country. But more importantly what they found was a good friend in their Realtor, Mirtha. “Mirtha’s experience and expertise helped take some of the stress out of buying a property long-distance. She went above and beyond by recommending home and pest inspectors, title company, arranging for deep cleanings before we arrived, and being present at the walk-through when we were not able. All in all, Mirtha became a trusted friend.”

 

The Waldrons have happily traded in their boots for flip-flops and are enjoying the Florida lifestyle in their Marsh Creek Country Club home. Despite the challenges COVID continues to bring, they are enjoying welcoming neighbors, golfing, and social events. And are beginning to create new memories in their new and perfect Northeast Florida home.

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Real Estate Market Update

October 14, 2020

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Posted by in News, Northeast Florida Market Trends

“A hero is an ordinary individual who finds the strength to persevere and endure in spite of overwhelming obstacles.”

Christopher Reeve

 

2020 has certainly presented some overwhelming obstacles and I have seen many heroes step up to help others. Many generous people are supporting our Davidson Cares Clay Day on October 29th and the charities are so grateful. You can still register to shoot or buy raffle tickets at DavidsonCares.com.

 

The Northeast Florida Association of Realtors market stats for September show continued strong demand for homes in Northeast Florida. There were 3,307 pending sales in September 2020 which is 36% more than the 2,436 in September 2019. We are up 9% year-to-date over the same period last year.

 

The inventory of homes for sale of 5,869 is down 39% from last September. This is the lowest level of inventory we have seen in this market. During the 2003 to 2005 timeframe when inventory was very low, there were still around 7,000 homes on the market.

 

The month’s supply of inventory is at 2.0 months. A balanced market is 5 to 6 months of inventory.

 

The median sales price is up 8% and the average sales price is up 10% year-to-date due to the increased demand and low supply.

 

Dr. Brad O’Coonor, the Florida Realtors Chief Economist provided some insight at the recent Florida Realtors convention. “The pace of residential building is still behind last cycle’s highs, and while building has continued through the pandemic as construction was deemed an essential occupation, costs of materials and labor have increased. Safety protocols for workers, some disruption in supply chains, and increased demand for materials all have translated into cost increases. Coupled with some uncertainty in lending, relief on the supply side is not coming from new construction.  For existing homes, the tap is dwindling to a dribble as current homeowners are living in their homes for an average of 10 years compared to only seven during the early 2000s. Uncertainty in the economy is also prompting people who can to stay put. That said, demand continues to be strong, as those who were sitting on the sidelines are feeling the pull to jump into a home for the first time or finally trade up, fueled in large part by record-low interest rates and the desire to upgrade to more “pandemic friendly” homes and locations. This all leads to an imbalanced market with demand outstripping supply, particularly in the single-family home category.”

 

It is a great time to sell your home! If we can be of any assistance in understanding the market or the value of your home, please let us know.

 

Enjoy the baseball playoffs and all the other great sports. Go Braves!

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