2020 Real Estate with Mary Ann Edwards
We will remember the year of 2020 as the year of unbelievable events and can definitely say it has been an unprecedented year of “Oh my God, really”.
But let’s not get too distracted. I want to talk about some information about real estate, and being a real estate agent, I want to share some interesting reading from the pundits in the real estate market. At least the information I agree with.
The number of homes sold in 2020 will lag behind the number sold in 2019. The reasoning behind this statement has to do with a lack of inventory. Not that there are not enough buyers on the market that want to buy a home, but there are not enough homes on the market to purchase. The problem is twofold.
Why Low Inventory?
One, people that own homes are not moving, a large portion of home owners cannot or do not want to move. This activity equals low inventory.
Second, according to the, National Association of Home Builders, there are not enough new homes being built. The builders in the Los Angeles, Long Beach area are down 9% from last year. They are not pulling permits to build single family homes, condos or apartment buildings. We just do not have enough new homes being built in this area.
Interestingly enough, this supply and demand imbalance will continue for the foreseeable future. This will continue to drive prices higher. Due to the competition for homes driven by historically low interest rates, this is causing an influx of buyers which in tum increases the prices of property.
The real driver in this house buying surge is an aging millennial population. This group is the biggest first time home buyer population we have seen in the last 5 years. As this group of buyers gets older there is a desire to establish community, family, and children. And this is also causing low inventory. With our current economic challenges we are sure to see an increase in foreclosures and defaults. This adverse market continues to be pushed out further and further into the future, because the government continues to implement the eviction moratorium. The government
stimulus has stopped and the 90 day forbearance programs are coming to an end. Unfortunately this will force some owners into the necessity to sell.
lt is unlikely we will see the foreclosure tsunami we had in 2008-2010. The huge surge of REO inventory will not happen because there is a lot of equity in these homes. It would be better to preserve the equity and sell instead of losing it all in a foreclosure.
If you are thinking about selling a home, please call me. Now is a time to do this. As a seller, don’t wait too long, because we will not see these prices for homes again. The pundits are saying that it would take another 10 years to get what you can get today for your home. Call me at (562) 544-0449.