Are we having fun yet?
Sixteen days into the new year! Are we having fun yet? It’s human nature to think that once we’d made it to 2021, we’d be able to wipe the slate clean and start over. Early returns suggest otherwise..
Covid is surging worse than ever. Vaccines are on the way, but when they’ll arrive is a mystery. Pre-existing rents in the fabric of democracy have been further torn asunder with uncivil unrest and insurrection but whether the inauguration of a new president will make a difference is a mystery.
Suffice to say: There are plenty of Donald Rumsfeld’s unknown knowns (or unknown unknowns?) We don’t really have a clue what’s going to happen in 2021 but the one thing our 2020 hindsight has taught us is: expect the unexpected and be prepared to adopt and improvise as the need arises.
So what about real estate? Here are a few of my own knowns for the coming year.
You can’t time a market in the time of corona. Covid changed the normal seasonal pattern of real estate. Spring disappeared in last year’s lockdown. Summer became the new spring. And spring just kept going right through the fall and winter. The lesson: If you are thinking about selling, don’t wait. If you are thinking about buying, get in line.
Distress market ahead? I keep getting emails asking about foreclosures on the horizon. Are we likely to see many? The answer is no! The majority of current homeowners have too much equity and can easily weather waves of uncertainty. The great recession was an implosion of the real estate market from within. During covid, residential real estate has been one of the main beneficiaries of the crisis.
Buyers Market? Don’t hold your breath. If you’re a buyer waiting for the market to soften, I implore you to think again. Yes, the market will go down at some point, but not for at least another couple of years. The longer you wait, the more you’ll have to pay even if prices do eventually go down a little. And interest rates probably won’t be close to 3% whenever that happens. Bite the bullet and buy while your purchasing power is at its peak. .
Inventory and Days on Market? Every major indicator points to a continuing Sellers Market, perhaps to an even crazier degree than what we’ve been experiencing. We’ve had historic lows of inventory and days on market for years now and history keeps rewriting itself each year to give us historically new historical lows. This year we should start seeing low inventory as a permanent new normal rather than historical precedent.
Continued next week….