Annual Report: Grand Strand Real Estate & Construction
The results are in for 2020 and while much of the coming year will hinge on the pandemic and overall economic factors such as interest rates and unemployment, we have compiled insight from several industry leaders and resources to bring you a snapshot review of 2020 and a forecast of what’s to expect now that 2021 is underway.
A Record Breaking Year Sets the Stage For Unprecedented Sales
If you have followed any of our recent monthly real estate market reports based on data from the Coastal Carolina Association of Realtors, you’re likely more than prepared for news that 2020 defied all odds to be one of the strongest markets since 2006! You can see the month-to-month analysis here and view the recap from BIC, Rainbow Russell below. Keep reading for an in-depth look at the trends that are influencing the current market as well as a forecast for what’s ahead.
View the 2020 Real Estate Market Recap From CRG Companies, Broker-In-Charge, Rainbow Russell
2020 Real Estate Market Overview
In a broad analysis of the 2020 real estate market, housing demand peaked when supply was low. These factors, combined with low mortgage rates to allow housing prices to tick upwards, creating the perfect environment for a strong real estate market. In an unforeseeable twist, rather than halting the market, the pandemic served as a catalyst spurring activity across several market segments, further contributing to the inventory shortage as well as fueling the rise in prices and in new construction.
4 Key Factors Influencing The Real Estate Market in 2020 and Into 2021:
1. Low Mortgage Rates - Economists industry wide believe the record low rates we’ve been enjoying could be coming to a close, but the transition will be slow. Following some fluctuations in the first few weeks of the year, rates have stabilized. Industry leaders anticipate it will be later in the year (if at all) before we see major changes. Still yet, expectations for mortgage rates to rise later in the year could result in an increase of buyers seeking to lock in rates as low as possible.
2. Shift In Buyer Preferences - the transition to remote work and home schooling during the onset of COVID-19 has become a permanent and/or semi-permanent lifestyle for many. This prompted home buyers of all ages to re-evaluate their preferences and plans for relocation. Spacious backyards, at-home amenities, home offices, and well organized living spaces are just a few of the key home features buyers are now seeking to ensure life/work/school at home can be comfortable for all.
3. Change In Seasonal Buying - Pent up demand from COVID shutdowns forced Spring buyers and sellers alike to delay plans until early Summer’s reopening. These buyers, combined with those from #2 above, created more demand for housing while many sellers were (and still are) hesitant to open their homes to the public.
Trend to Watch: The late fall and winter months of ‘20-21 have already proven to be unaffected by the traditional seasonal slowdown. Some experts attribute this to buyers realizing that the pandemic is still far from over, thus moving forward with already delayed plans. However, as virtual technology emerged and evolved as the saving grace during the pandemic for a safe way to buy, sell and even secure financing, we anticipate consumer demand to keep virtual home buying as a standard long after the end of the pandemic, especially for remote buyers looking to relocate to areas such as Myrtle Beach.
4. Inventory Challenges - We literally can’t say it enough. All of the above factors combined to create plenty of buyers, while sellers remain in short supply. Adding to this, buyers who can’t find housing to suit their new host of needs are turning to new construction, causing its own set of challenges with supply and labor issues.
Adding to the inventory shortage even more, Millennials are also entering the scene as prime first-time home-buyers who are also now largely remote workers. This ability to work from literally anywhere, coupled with mortgage rates hovering near record lows, they are finding homeownership is now within reach.
2021 Real Estate & New Construction Forecast
If 2020 taught us anything, it’s that the market and (life in general) can change in an instant despite our best planning. There are, however, several factors that influence our anticipated real estate market activity and most are pointing to a continued increase in numbers across the board.
Spring is anticipated to be one of the best in recent history, here are the top factors we will be following that will influence the real estate market over the next several months:
COVID-19 Vaccine Distribution - this should be well underway by spring which will result in local economies and schools to fully reopen.
Material & Labor Shortages for New Construction - Housing starts skyrocketed in late 2020 which point to an active year however, higher material costs and a limited supply of buildable lots could hinder construction growth if buyers aren’t able to wait for longer build times.
Trend to Watch: An increase in new construction activity almost certainly will lead to an increase in “pop-up builders”. If you are considering new construction be sure your builder is a reputable, established company that will be around long after you have moved in!
Increased Relocation Activity - For many, the uncertainty over jobs being performed remotely in the long term will be answered in the coming months thus adding buyers to the relocation market. Likewise, a harsh, quarantined, winter in the Northeast has many seeking to move to less populated, coastal areas.
If you are considering a move or the market news has you curious of your home value, contact our team for more information. Regardless of your stage in the process, CRG is a fully integrated company offering real estate, home design and construction services, and we are here to help!