Alexandria, VA – Can you believe it’s the second half of 2020 already?
On the one hand, it seems like this year will never end and yet can’t end soon enough! From lockdowns, quarantines, and a global pandemic to political, social, and economic unrest, 2020 has proven to be unlike any other year.
But with the bad of 2020 also came some good, with many people seizing opportunities for positive change and seeing some light through the darkness. Even as we struggled through months of upheaval, we are fortunate that the local real estate market was one bright spot amidst the chaos.
So far this year
As the pandemic has worn on, we’ve seen the dynamic change. At the start, we were just thankful that the real estate industry was officially declared essential in our region. Interest rates fluctuated a bit during this time, with many banks unable to fund jumbo loans. This meant the mortgage market got a lot more competitive and loans took longer to close. Inventory remained low and buyers were slow to enter the market.
Since then, the market has returned to being very robust and (somewhat) typical for our region. With a few exceptions (condos and luxury homes), we are back to a market replete with multiple offers, escalating prices, and few contingencies.
Coming up: the Presidential Election
In presidential election years, our local housing market usually slows in the late summer and fall as we all gear up for months of uncertainty over a potential change in the administration. Normally, I would say that 2020 would be no exception as we face what is likely to be a raucous election. Still, this year could be different. Local residents who face job uncertainty with a change in power will likely pause plans to sell or to buy. While we don’t anticipate this year’s dip to be as significant as in past election years, we do anticipate the same post-election rebound we’ve seen in past election years.
The importance of home
This is the big one. This year, people have become very aware of their homes’ imperfections and of what they want in their next one. Fear of another shutdown or the potential for permanent telework has affected many people’s priorities. Some find that they no longer want to pay big money to be close to their jobs, and with many employers making permanent shifts to telework, this has become possible. And while we have seen many people move to get more space (such as a real home office) or more things that have become important to them in quarantine, there are still a lot of unknowns.
Interest rates have been historically low for some time. There was a spike in spring 2019, and another brief spike at the beginning of the COVID-19 spread. Since then, rates have come down to another historic low, which makes buying very attractive. On a recent regional sales call, Compass CEO Robert Reffkin reminded us all that, historically, when the economy has struggled, interest rates have lowered, which has opened up the housing market and kept it moving.