A Look At The Real Estate Market: Now vs. Then

The COVID-19 Pandemic changed the real estate market in Florida and around the United States. COVID-19 caused economic shutdowns and restrictions. The US government took actions to compensate including reducing interest rates to near all-time lows. Overall, the pandemic changed price trends, financing costs, and the number of homes for sale in Central Florida.

In early 2019, low mortgage rates in the range of two to three percent caused an upsurge in demand and home sales. Across the US, new buyers tried to enter the market and existing homeowners sought to purchase larger homes. Beginning in late 2019 and continuing into 2020, the supply of available housing decreased sharply. By late 2021, there were severe shortages of available housing for purchase.

– Pandemic Impact

According to Realtor.com, the number of homes for sale dropped sharply during the last two years. Realtor.com reported that from December 2019 to December 2021, the number of homes for sale dropped by more than fifty percent and prices rose by about 25 percent. On a year-to-month basis, the number of homes on the market lost more than 25 percent compared to the same period in 2020. The year-to-year difference meant that there were about 175,000 fewer homes for sale.

The winter months are traditionally slow, but COVID-19 impacts have made the traditionally slow months much slower. Among the reasons for fewer listings is sellers were reluctant to open occupied homes to strangers during a period of high COVID-19 spread. Fewer listings fueled higher prices as high demand created a seller’s market.

During the pandemic, low-interest rates inspired many homeowners to sell and buy larger homes. Rising rates may reduce advantages for existing homeowners to sell and supply chain issues continue to limit the number of new homes. Short inventories raise prices, and higher prices affect new and other home buyers.

– Today’s Markets

Current markets show low inventories, soaring prices, and high demand. Buyers struggle to find opportunities in most large city markets. The Tampa region was among the leaders in rising home prices. The pace of sales has also increased with a drop in the average days on the market.

As interest rates begin the expected series of federal increases, buyers try to lock in current rates. In Florida and in most markets, buyers must act quickly. In hot markets, some purchasers commit sight unseen. Sales remain brisk in the few large cities markets that have increased available housing.

– Looking Ahead

No one can precisely predict the market conditions for 2022 and beyond. Current trends are likely to continue for the near future, and buyers will have to act fast to locate homes, successfully purchase, and take advantage of low-interest rates. Among the positive signs, experts predict an increase in the inventory of homes for sale in Central Florida in 2022.

In 2022, the demand for housing will likely continue to be strong. Interest rates and the monthly costs of mortgage financing will rise slowly. Price rates will level as markets stabilize, and buyers may have less difficulty finding homes for sale. Successful buyers will enjoy relatively low mortgage rates and manageable financing costs.