HOME BUYING SEASONALITY
RETURN TO PRESALES
The traditional seasonality in the residential market completely shifted in 2020 due to COVID-19. The spring market is usually one of the strongest times of the year. There is a spike in activity once the warmer weather hits, as buyers are motivated to move in order to get settled before vacation season in the summer and school starting in the fall. Due to the stay-at-home orders and general economic uncertainty brought about by COVID-19, this shifted to the summer months in 2020. We anticipate with mortgage rates remaining steady, that the traditional seasonal spike could likely return. Signs of increased activity in early 2021 are positive indications for a strong spring market.
We believe that as 2021 brings more vaccinations, more consistent work structure, and renewed confidence in the economy, buyers will again be willing to purchase homes pre-construction. With the severe inventory shortage in the region, we expect to see buyers happy to commit 6 to 12 months ahead of delivery, as was common before the pandemic.
CONTINUED PENT-UP DEMAND The fundamental reasons that consumers had to make a homebuying decision will still be there when this crisis is over. If they needed to downsize before, they likely still will. If they wanted singlelevel living and less maintenance, that will not change. If a family is growing and needs more space, one can only imagine how they will feel after this time of being at home for the majority of 2020. And for those first-time homebuyers who were delaying their decision to purchase, it is possible that spending all of this time in their current living circumstances will prompt them to take action this spring. UNKNOWN VARIABLES
URBAN PACE REMAINS OPTIMISTIC As we all continue to navigate through the unprecedented situations from this year, we are still confident that the DMV will get through this truly unique time and we are looking forward to positive news in our community and real estate markets in 2021. Despite COVID-19 accelerating and magnifying challenges in the real estate industry, we see the opportunity for creative opportunities for both our clients and our team. The past year has shown that we can work, learn, and socialize remotely, but it has also reinforced the vital necessity of in-person interactions and the inherent joy of mass gatherings. In coming years, as technology plays an ever-greater role in our interpersonal lives, Urban Pace sees an endless demand for that vibrant lifestyle that only cities can fulfill. For all these reasons, Urban Pace remains optimistic for the year ahead. We are hopeful that as we return to a “new” normal, the city will reopen and reemerge for all aspects of the real estate community, to be a vibrant and central hub for housing activity.
One unknown variable that will have a direct impact on sales will be the state of the mortgage market as we move through 2021. The start of 2021 began with rates holding at lower levels, as the new political administration began to settle in and implement some new initiatives. Some of those initiatives include the distribution of the COVID-19 vaccine nationwide and stimulus packages to help employers and individuals during these challenging times. Looming unemployment and overall economic recovery will also factor into housing demand. The depth and duration of COVID-19’s impact on the economy is still unclear, but we believe recovery will be steady as we progress through 2021.
51
