December 2020 Market Update
An unexpected hot real estate market
It’s certainly been an expected year for the real estate market. As the pandemic began ramping up in March, many had initial concerns about how real estate prices would be affected given the immediate rise of unemployment. Now we know that the pandemic provided benefits to the real estate market that no one could have predicted 8 months ago.
So, what are some of the key changes to the market that we saw in 2020?
The massive shift to working from home has had a dramatic effect on the market. In the Bay Area, most residences are dual income. With two adults working from home on a full time basis, the current set up of many households is just no longer functional. At the very least one office space is required and even a kids learning studio is needed!
There’s also the concern about proximity that was not there pre-Covid. High-risk individuals who have concerns about protecting their health aren’t interested in living close to others, making condos and apartment rentals much less popular.
Not to mention the fact that apartment residents are being charged for amenities that are currently unusable due to the pandemic, such as gyms, pools, etc… This has folks looking at options outside of high HOA locations.
Probably the greatest silver lining to the pandemic has been the record low interest rates we’re seeing in the market right now. At the moment, interest rates are as low as 2.5%. With rates like these, it’s not just an amazing time to purchase a home, it’s also an ideal time for a trade up. Don’t hesitate to take advantage of this unique market.
Hopefully, the challenges of this year are temporary. Covid-19 vaccines have been approved, tech continues to push and hit record growth, Tech IPOs and SPACs are underway, and more supportive stimulus money is coming. Because of this and given how busy it has been this Winter, I predict that 2021 will shape up to be one of the most intense real estate markets in recent times.
My Top Tip
If you haven’t refinanced, now is the time! Over 60% of homeowners in America have an interest rate at over 4%-- way too high given the current market. Reach out and I can introduce you to a preferred lender.