Anyone feeling a little déjà vu?
In the “Glory Days” of 2005-2006, many houses sold within 24 hours of hitting the market. If you were house shopping, it meant you needed to get in line. New communities had lottery systems and building a new home meant you might be waiting a couple years.
Fast forward to 2020-2021 and the mood seems oddly similar. Sellers are on top of the world, inventory is limited, and houses don’t stay on the market longer than an eye blink. We’re seeing more and more urgency, with buyers settling for “good-enough” after 3 or 4 unsuccessful bids on other properties. Statistically, we are indeed experiencing a lower than 2005 supply of inventory, truly driving prices higher. The demand is real.
As seasoned real estate agents, we’ve seen enough and been through enough to know when a market is shifting, and caution is key. Is this a long-term boom? Should we brace for a crash? While it’s true the similarities are hard to deny, there are several very distinct differences, and those differences will determine how this will all play out.
The pandemic has certainly influenced sales in a big way with the work-from-home trend driving the need for more room, dedicated office space and outdoor lifestyle opportunities. If you can work anywhere, why not Florida! Out-of-state buyers are consciously choosing Florida for a lower cost of living, cheaper property taxes and less expensive housing overall. We’re also beginning to see Millennials appreciating the value of home ownership. Now that they’ve entered the workplace and secured great jobs, buying a home is the next logical step.
Interest rates and instant equity may also play a part in the 2021 difference. I think back to a time where there were no-documentation loans with lenders, agents and appraisers playing loose with the rules. It seemed anyone and everyone could be a homeowner with “interest only” loans. However, this time it is different. There are tighter qualifying restrictions with super low interest rates and built-in equity scenarios making this quite dissimilar to the crash. Some of you may remember that prior to the great recession, there were huge numbers of investors and prospectors trying to make quick money through inflated appreciation. Flipping a house seemed as easy as flipping a pancake. The good news is, we aren’t seeing that same type of activity this time around.
The optimist in me feels good about this and believes there are exciting times ahead. New growth for our area will definitely have some consequences but I’m reminded of my move to Parrish in 1988, and all of the good things that followed, such as schools, restaurants and shopping.
So, speaking of moving…Yes, real estate companies move too! With all the big things on the horizon for the entire North of the Manatee River area, we are positioning ourselves to play an even bigger part in the future of this wonderful community. Not only will we be expanding our physical location, but we will be home to an even larger group of well-trained professional agents with an extreme focus on service to our clients. And just as we have for the last 20 years, we remain committed to sponsoring our local schools, churches, and other fundraisers. As always, thank you for making this possible.