2020 Year-End Market Summary: Recovery and Looking Ahead
The Holidays are now behind us. The wine bottles are all in the recycling and we contemplate how long we can leave up our Holiday decorations. Our market now enters the usual "Dry January" lull. This year, the lull will be short-lived as many homes are preparing to come to market early this year.
Last month I took a shot at forecasting 2021. We'll see how that works out. But given that the year is young and the market is quiet for now, this report will be very brief and simply point out where our market finished up in 2020... the year that none of us predicted!
The Market Snapshot
Unit Volume and Dollar Volume recovered to 2019 levels
- 2020 ended with a number of homes sold down only 4% versus 2019. Certainly a far cry from where we were in April and May.
- Due to the increase in home appreciation and the steady improvement in sales in our entire market area, we are now UP 5% in dollar volume over 2019. Again, nowhere near the depressed levels we saw in April and May.
The Median Price is UP and Home Equity on the rise
- Our entire market is up 10.5% in Median Price over last year.
- That means the Median Priced household of around $1,050,000 has realized about $100,000 increased home equity.
Real Estate as Economic Recovery Leader
Very early last year, a good friend of mine, Matthew Ferrara, made a very bold statement about the role of real estate in our pandemic economy. He contrasted the Great Recession of 2007 to our pandemic recession that began last March after the first Shelter in Place orders were issued. Matthew's point was that the real estate and mortgage markets were in poor health leading up to the Great Recession. Speculation was rampant, loans were made with little concern for the ability of the homeowner to repay, and teaser rate adjustable loans reset causing payment shock for thousands which led to mass foreclosures. Back then, Real Estate was the problem. However, in 2020, both the Real Estate and the Mortgage industries were healthy. The current recession was caused by a virus and, he predicted, Real Estate will be one of the main financial sectors to lead us to economic recovery. Good call!
Looking Forward to 2021
We all look forward to a return to "normal". 2021 starts with hope and promise; rain has hopefully ended the fire season, the elections are behind us and the vaccine is on the way. As we look forward to the new year, it is worthwhile to reflect on the past year. We have all made changes in our lives and pivoted in our businesses. And while the prohibitions of the pandemic were clear, there were also many permissions that allowed us to make lasting changes in our businesses and our lives. As Matthew also says, "Our greatest growth happens at the corner of life and change."
I hope you all had a wonderful holiday season and were able to safely spend time with family. Happy New Year.
Until next month, stay safe and healthy.
