Real estate agents weigh in on important topics and give residential advice based on their years of expertise. This month they are speaking on the current climate of the real estate market and how Covid may affect it into the future.
What, in your opinion, is the reason the real estate market is doing so well right now?
Corcoran Reverie, Hilary Farnum-Fasth - Low inventory, huge demand for the beach life. Covid has changed where people can work and therefore where they can choose to live.
Kathleen Floryan - It is totally supply and demand. There are over 10,000 realtors in our area, right now only 2460 residential listings in the entire NE Florida MLS. (greater Jacksonville). 1793 are single-family homes. 245 are condos, 232 are townhouses. Prices are being bid up sometimes as much as 100K over list price. When there is a shift to a more normal market (6 months of inventory) and people feel more confident about selling their homes because they have a place to move to... then we will see some stabilization from this super abnormal seller's market. The migration into Florida with more than 1000 people a day won't be stopping any time soon unless there is a major political change or natural disaster.
Darlene Streit - There are many factors, but most are in response to the pandemic. After over a year of challenges, people have prioritized what is most important to them, and with work-from-home making it easier, they are moving, downsizing, upgrading, and retiring to improve their quality of life. Also, with mortgage rates relatively low and more available cash due to less spending this past year, people are buying investment properties as well.
Dan Hechtkopf - So many different factors. Covid was the last straw for many in states like NY and CA. Pushed them over the edge to make the move to Miami. No denying that our lifestyle here is better than around the country, tied in with no income tax. Now it's simple, supply and demand. Not enough inventory for the demand of the buyers moving here, or locals looking to purchase.
Joel Schemmel - There are some fundamental shifts in lifestyle, work mobility, and financial/tax incentives that continue to drive the real estate market in Florida and Sarasota. We have basic migration from many states including New York, New Jersey, Illinois, Connecticut, California. A combination of retiring baby boomers and the new ability to work remotely are fueling that migration. For the time being, I just do not see supply catching up to the demand for real estate.
Debbi DiMaggio - During COVID our market soared beyond expectations. Buyers had the time to search for homes, and Sellers had the time to contemplate their future and next move. Some retired early, other Sellers moved into their second homes making it their primary residence. And with the inability to travel, working from home, commutes non-existent, Buyers rushed to purchase their first or second home, scale down or move up into a larger home, thus causing a shortage of inventory and higher prices.
Barbara Van Dyke - There is a combination of factors driving the real estate market right now including low interest rates, a massive number of millennial buyers coming into the market, and the desire for more space because so many are now working from home. The ability for people to work completely from home has also driven many to move across the country to more affordable locations or, in some cases, to their “dream” location.
Jeff Hendley - We saw Covid ignite a sense of urgency with buyers who thought - ‘If ever I was going to make a move, now is the time’.
Toni Itkin - The obvious reason is, of course, low interest rates, low inventory, and high demand. But to add to that is a new entry into the market that was not there in a big way before and that would be the Millennial Buyers. They are now of an age where they see real value in homeownership and a way to add to their stability. Some are buying the old-fashioned way with savings, but others are benefitting from a transfer of wealth or inheritance. Whatever the purchase method, they want to get themselves and/or their family into a more secure investment and out of the rental market.
Anne-Britt Ostlund - Unlike in 2008, there is a lack of inventory in the market right now and just like in Economics 101, it's the simple supply and demand equation, we simply have more buyers than sellers right now.
Christie's International Real Estate Seattle, Scott Wasner - People have gone into a nesting mentality and are looking for more space to connect with family and friends. With the lingering travel restrictions, that means these connections are happening at home. This combined with the low interest rates we’re seeing right now has caused people to look for new homes.
Tim Durkovic - In my market I think the main reason it's doing so well is a very simple reason - Supply and Demand - there is WAY more demand than supply which is creating a "feeding frenzy" mentality!
Kristine Farra - The "work at home" requirement resulted in the need for increased space, home offices, a dedicated place for children to home school, larger gardens, places to play, and increased personal space. Staying at home with a more casual lifestyle, enabled increased savings, coupled with low interest rates (and perhaps more importantly impending higher interest rates), made this the right time for many to purchase that new home.
Dante DiSabato - In my opinion, there are multiple reasons why the market is doing so well. 1. The stock market is at an all-time high. 2. Rates are low for people to borrow. 3. There is a demand for physical assets to hedge against inflation. 4. There is a lack of inventory. Simply put demand outweighs supply. Also, I feel there is/was a mental aspect that people want a home or a place to call their own after being locked down for some time. With all this combined this creates a seller's market. On a micro-level, a lot of people are moving to Florida due to tax reasons.
The Pearl Antonacci Group, Brian Pearl - I feel that the real estate market in South Florida is booming right now for a couple of reasons. For sellers, the lack of inventory available is giving them the upper hand and allowing them to get top dollar even if that's more than what the property would typically allow; in many cases, the market value is higher than the appraised value, which gives cash buyers a strong advantage in multiple offer scenarios. Buyer demand is strong due to record-low interest rates, relocations from around the Country due to Florida's warm weather, tax advantages, and homestead laws.
Elliot Bogod - Because of the COVID pandemic we couldn't show apartments to people in person last spring and part of summer. Also, New York had an exodus of people last 18 months and New Yorkers are coming back now, we see many moving trucks on NYC streets. Fear of missing out is another factor that we are calling this market FOMO market. Prices and interest rates are historically low and this market is buyer's market first time after a decade of seller's market in NYC.
Elisa Hanson-Linton - Rates are still significantly low; now is the best time to buy a home or investment property.
Laura Browne Livaudais - Quality of life (#1 on people's wish lists) is easily and readily found in Asheville. Quaint mountain town. Hipster haven. Bluegrass home. Outdoor oasis. Beautiful Blue Ridge Mountains. Culinary foodie destination. Cultural retreat. College town. Beer lover's paradise. Uniquely known for its laid-back culture that mixes Southern hospitality with an artistic spirit. No matter what a person's interests may be, Asheville has something to offer. As a result, instead of just visiting, people wish to call Asheville home.
Wendy Gragg - The Santa Barbara Real Estate market has had 1 month of supply for all of 2021. Demand is staggering. The market will continue to remain strong so long as this remains.
The Alex + Joe Team, Alex Miranda - As global and domestic markets reopen, we are getting another batch of buyers. We are also seeing an increased number of buyers relocating to Miami and Palm Beach that work in tech and finance.
Jennifer Brilliant - There is a lot of pent-up demand and very little inventory/supply, so most properties receive multiple offers when they hit the market and sell for premium prices.
Roberta Ingletto - The demand surpasses the supply. Simple.
Phyllis Browning Company, Jennifer Shemwell - This is an exciting time for the Texas real estate market as so many people are attracted to our pro-business climate with so many relocating from out of state. We have more buyers in the market and prices are going up. We are still replacing much-needed new home inventory from 2008-2009, so we are rushing to keep up with demand.
How will Covid affect the real estate market into the future?
Corcoran Reverie, Hilary Farnum-Fasth - Covid has affected real estate in the future because it has reset the value of properties and the value people place on their homes. Home life has always mattered but now people realize it’s everything. No longer will people want to settle for less space, less yard, less whatever it is that makes them comfortable at home with their families. The design of homes has shifted with the desire for private spaces to work, do school life, etc.
Kathleen Floryan - Covid has changed the way many real estate brokerages do business and more virtual transactions will occur as the populus becomes more comfortable with online communications. The challenge for real estate professionals is developing social proof that they are "go-to" and "trustworthy" professionals who can help them achieve their goals of homeownership. "Sight Unseen" and "As Is" sales are becoming more frequent and moving toward the norm. The availability of high quality, 3D interactive photography, Zoom/Facetime, and other methods of communicating the home value proposition is critical and also becoming the norm. I think the demand for more info on home mechanicals eg. HVAC systems, electric, plumbing, foundation, roof conditions are the only pieces missing and will soon be incorporated in the near future for buyers to learn about the product they are buying.
Darlene Streit - It's always hard to predict what may happen, but the fact that a good number of people are vaccinated should minimize the chances of another major shutdown. We've learned from this past year dealing with COVID, and I think the strategies we employed to get through will serve us well ongoing. If another situation happens in the future, we'll be more prepared – and as we've seen, real estate is an essential service that is always needed.
Dan Hechtkopf - Covid opened the eyes of businesses, showing that people don't necessarily need to work from traditional offices. Now we are seeing more and more buyers shifting to home offices. I think this will continue.
Joel Schemmel - Covid has already had a material impact on real estate and this will continue into the future. In particular, in relation to work mobility. It will interesting to see how major companies embrace this new environment and how that will affect real estate in different ways throughout the country. Some markets will benefit – others perhaps not.
Debbi DiMaggio - As we glide into summer, travel is significantly up (with many vaccinated and our country now open), which means Buyers will take a break from their home-buying search. In the East Bay, our inventory is always low so I don't see a huge change. I believe we will go back to a Pre Covid market cycle, whereas from February to May and September to Mid November will be saturated with Buyers, thus limited inventory and over asking sales, and there will be a lull of activity (not dead) but fewer Buyers looking during graduation season towards the end of May through the end of summer. And of course, a slowdown in Buyer activity from Thanksgiving to the end of January.
Barbara Van Dyke - Covid has highlighted the importance of home as a safe place, a sanctuary where we can take shelter from the craziness of the world. That is a trend that I believe will continue to be a prominent theme for years to come, regardless of what happens with the virus.
Jeff Hendley - The current market in Denver, like many other major markets, is more about supply and demand and less about valuation. However, Denver is well-positioned near and long-term due to quality of life and desirability from a business standpoint.
Toni Itkin - I believe people now realize a bit more of what is really important to them in terms of what really meets their needs and wants in a house. Examples would be that the floor plan is flexible enough to accommodate unexpected developments like homeschooling, remote office work, extended family stays, ample outdoor space. Out of all the tragedies from this awful plague, I think the Covid experience will have some very positive effects in this regard.
Anne-Britt Ostlund - It seems that people have really changed the way they view home and work. Many people have adapted to a hybrid office time/home office work situation so they can more easily live where they like to play. The Home became the center of it all again, while we were seeing a shy away from larger homes coming into the pandemic, being able to have the extended family visit and stay for extended periods has become important again so larger homes and estates are making a comeback. Also, a move to more rural areas continues to rise as more people are able to work from all over rather than one centralized location. I think that is a permanent change.
Christie's International Real Estate Seattle, Scott Wasner - People have realized that being comfortable at home is a priority for them. They now see the benefits of having amenities in their buildings if they live in a condominium residence or having amenities like state-of-the-art kitchens, at-home gyms or home theaters in single-family estates. Home has become more of a safety zone than ever before.
Tim Durkovic - I think COVID caused us all to go through a reset - as a result, what people are looking for in homes has changed a bit too - I think things like multiple office spaces, home gyms, outdoor areas, defined spaces, and less of an open concept are all things that we will see becoming part of what we see as being desired in homes.
Kristine Farra - On the commercial side, with many willing and preferring to work from home, expect smaller footprints from many corporations, affecting leasing rates and property values. On the residential side, millennials are taking the leap into larger homes, enabling empty nesters to sell their homes at a peak price and returning to luxury city condominium life and white-glove service.
Dante DiSabato - I don’t think Covid will affect the real estate market in the future. I think with the vaccines and more understanding of it that there won’t be an effect.
The Pearl Antonacci Group, Brian Pearl - I feel that things will get back to normal in the next 12-18 months unless we see another spike in COVID variant cases. The largest changes will be in the commercial office space industry and having employees work remotely (not just in the real estate industry but in all industries). I do feel that landlords of large buildings will need to restructure how they run their businesses and offer employees the option to work from home which will ultimately save them money in leasing office space.
Elliot Bogod - People are using their real estate investments as a hedge against inflation. We will see trillions of dollars of US Governmental assistance for COVID-related causes. Inflation will rise and real estate is historically proven to be an asset that generates income and protect its owners against currency fluctuations and inflation.
Elisa Hanson-Linton - Now that many employers have mastered the art of work from home due to Covid, employees can live anywhere that has an internet connection. We will continue to see employees move closer to their families and friends or states where the cost of living is lower.
Laura Browne Livaudais - For more than a century, Asheville has been known as a healing place. Ever since the 1920s, people have been coming to Asheville for the 'waters' and the fresh clear mountain air. Since Covid protocol often required physical distancing, instead of being stuck inside & homebound, Asheville's abundant outdoor living spaces offered boundless options. From the mountains to the forests to the rivers, being in the midst of Mother Nature - and still physically distanced from others - was (and is) a priceless and restorative gift found right here.
Wendy Gragg - Outside of another surge followed by a large shutdown, I don't think Covid is a factor.
The Alex + Joe Team, Alex Miranda - COVID accelerated a shift to lower tax states like Florida and Texas. The adoption of technology has made it easier for Americans to work remotely from anywhere. And many have chosen South Florida for its sunshine, turquoise waters, and culture. I see more developers incorporating home offices and demand for increased square footage remaining for the foreseeable future. And I see the office, retail, and hotel markets improving as the world returns to South Florida.
Jennifer Brilliant - The pandemic will contribute to additional demand because many people can now work from anywhere and Miami's climate and lifestyle are very desirable. In addition to this, I believe that people from high-tax states will continue to move to Florida.
Roberta Ingletto - In the future, Covid will not affect the real estate market. Now that mostly everyone is vaccinated, people are pretty much living normal lives. What Covid already did was expedite the transition of working more and more with technology, which was bound to happen anyway. Covid forced us to be creative and change the way we do business by working remotely, doing things virtually, etc.
Phyllis Browning Company, Jennifer Shemwell - COVID 19 has inspired many residents and visitors to invest in second homes, as they have discovered the possibilities of working remotely. Other owners are renovating for the same purpose. Many others are purchasing new homes locally due to spending more time working from home and change of the way they use their homes. The housing industry in our area has continued to grow and we look forward to the future.