2020 Year End Market Review and 2021 Predictions

2020 was a year that no one predicted and no one will forget.  From a worldwide pandemic to political unrest to entire country economies being shut down.   Who would have imagined a facemask would be the hottest and most controversial fashion statement, or that the US would run out of toilet paper, traditional family gatherings would be done by video, and it being totally acceptable to wear a facemask into a bank.  The list of unprecedented national stories is, quite frankly,   . . . unprecedented.  Let’s bring it closer to home and see what 2020 had to offer in the Bartow County housing market.  Hi, I’m Bonnie Mullinax with the Mullinax Team at Keller Williams and I am here to discuss the facts with this edition of House Calls with Bonnie.

So let’s compare how 2020 finished out the year compared to 2019.   2020 ended the year with an average sales price of  $270,500  vs 2019 at $231,600.   That is an increase of almost   17%.    A very very healthy increase.  Home sales were virtually the same at 1554 sales vs 1558  last year.  So why the big increase in price?  Inventory dropped in half from 345 homes for sale to an all time record low of 174 homes for sale.   Also, 272  less sellers put their home on the market.  This is of course the big story of the year in housing.  

So why is this happening?   Well,  the pandemic of course was the initial driver.  Seller’s didn’t want people in their homes, but why is it continuing?  30-year mortgage interest rates have dropped from a very low  3.74% to an amazing low of 2.67%.  Money is incredibly cheap.  But like a two edged sword, investors flush with cash  cannot get a good return on their money, so they are looking for places to invest it and they are turning to investing in rental property.  Rents have skyrocketed, especially this year.  Institutional investors are buying homes by the hundreds offering fast closings with cash at or above asking price and beating out owner occupied offers.  35% of homes are bought with cash.  

So with 2020 in the rearview mirror, what are the 9 most important things we see for 2021 and what local homeowners need to know.  

1.   Home prices will continue to rise and 2021 will continue to be a seller’s market.

2.   Rental prices will continue to rise as more potential home buyers are priced out of the market.

3.   Lack of inventory will continue at record lows as demand remains high.

4.   Investors will continue to be a huge buyer of homes and will keep prices high.

5.   New homes building will continue at record levels because of high demand and lack of inventory.

6.   Hundreds of new apartments will be built as renters flee higher prices in Atlanta.

7.  Interest rates will rise slightly during the year from current record lows as the national economy picks up and inflation begins to creep in.

8.  Bigger homes with work rooms, outdoor spaces, and home entertainment will become the norm as more people continue to work and live from home

9.   Foreclosures and evictions have been in a moratorium since the pandemic began despite the fact that millions of homeowners are delinquent on their payments.  The only foreseeable driver we see that could change the direction of the market will be a big surge in Foreclosures.  Watch for policy from the new administration and the big banks.  

Don’t hesitate to call us to find out what your home could sell for in Today’s market and also how we specialize in coordinating the sale of your home with the purchase of your new home.   For more nerdy data, visit our blog at mullinaxteam.com and feel free to like, share, and comment on this video and I look forward to connecting with you soon.