Hi I’m John Garuti of JG3 Homes Brokered by eXp Realty bringing your November 2020 real estate market update from Southwest Florida.
As we enter the final months of 2020 and continue to work through the challenges this year has brought many of us are wondering how it will affect our home values and the corresponding markets. Looking at the big picture rules of supply and demand will give us the clearest idea of what is to come.
When there is an undersupply of homes we see an upward pressure on prices. Let’s think in simple economics. When there is high demand for an item and a low supply of it, consumers are willing to pay more for that item. That is exactly what is happening in today’s real estate market. Additionally, housing supply shortages routinely result in bidding wars which will drive price points even higher.
At this time, there is no trending evidence that buyer demand will wane. As a result, experts project price appreciation will continue over the next twelve months. Here’s a graph of forecasts released showcasing big outfits like Zillow, National Association of Realtors and Freddie Mac. They are predicting home appreciation ranging from 3 to 7 % in the next 12 months.
Now, a lot of people have been asking me – but John, what about the risk of foreclosures? Is it anything like 2008? If a string of foreclosures happen, won’t that drive prices down?
Some are concerned that homeowners who entered a mortgage forbearance plan might face foreclosure once their plan ends. However, when you analyze the data on those in forbearance, it’s clear the actual level of risk is quite low.
Ivy Zelman, CEO of Zelman & Associates and a highly-regarded expert in the housing industries, was very firm in a podcast last week when addressing the subject: “The likelihood of us having a foreclosure crisis again is about zero percent.”- Ivy Zelman
Bottom line, while many thought home prices would depreciate in 2020 due to the economic slowdown from the coronavirus and political uncertainty the opposite has actually occurred.
So what does all this mean if you are a home seller or buyer in Southwest Florida?
As a homeseller, you are poised to win big if you put your home on the market now. Showings are up 62% compared to this time last year according to the National Association of Realtors. This strong demand has driven Southwest Florida into a complete sellers market. Compared to this time last year, home prices are up 15%. Seller’s are in the driver seat right now, which will give you options to pick the best deal. My best advice on how to take advantage of this market: LIST NOW. Do not wait until spring 2021. Historically people tend to wait out the winter and list in spring time.
Why NOT do it now and give your property a chance to stand out!
And now for homebuyers – how do these current market trends affect you?
As a home buyer, you’re probably thinking I might want to wait this out for a few months to see if the market changes. What if I told you the best time to find a great deal is in fact, right now? The best buying deals right now are with the new construction builders, as they are offering great incentives, especially on inventoried homes. Mortgage rates are still hovering at record lows and there are plenty of opportunities when you know where to look.
Another thing to consider when buying new construction compared to traditional housing: There is no waiving appraisals, waiving inspections or getting into bidding wars just to secure the deal.
I hope you found this market update enlightening. Please like, comment, and subscribe to my channel for future Southwest Florida real estate market updates. Send your burning real estate questions via text or give me a call – 941 916 2859. I’ll see you for the next market update in December.