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As I wrote my newsletter article back in March, little did I know that the DC area real estate market would be breaking records just a few months later. While unemployment rates rose in the DMV from 3.3 percent in June 2019 to 8.5 in June 2020, we saw no let up in the hot 2020 real estate market. Why is that? A number of reasons.
- (Mostly) Stable Employment. Despite the unemployment rate, we are in an area where federal and military jobs, lobbyists, and lawyers keep the local economy humming.
- Low Inventory. Buyers are nervous they won’t find a home as prices continue to rise and fewer homes come on the market. Sales of previously-owned homes surged almost 25 percent in July to their highest rate since December 2006.
- Low Rates. Historically low interest rates make now an incredibly good time to buy. Motivated buyers of all ages are diving into the market as low rates provide much more buying power.
- Rentals Are Challenging. Due to recession fears, many sellers are reducing their portfolios — selling their rental properties and kicking out buyers. In large apartment complexes, rents and fees continue to rise.
- Isolation. Several of our senior clients in single-family homes are feeling isolated during COVID and started looking for senior living communities and condos. Others are moving closer to their adult children.
- Looming Retirement. Many senior executives are taking advantage of telework and deciding now is the time to sell and buy where they want to retire. They are renting local “pied-à-terres” until they retire and move.
- The House Doesn’t Fit. A home that was big enough as a landing pad for a busy family suddenly feels much too small. With parents teleworking and kids learning online, more space is required for home gyms, offices, and entertainment. Some want more outdoor space, room for visitors, or a yard for a dog. Some are selling their DMV homes to buy a smaller place and a second home someplace fun.
- Lifestyle. COVID has given people a glimpse of what a slower pace of life in our area looks like. They are pursuing their passions, moving to an area they have always loved, or simply wanting a smaller mortgage. Without the things we might normally buy (and don’t necessarily need) such as restaurant meals, travel, concerts, people have more money to put towards housing costs.
- No Travel. Trips have been canceled and those who traveled a lot for business are staying home. We have sellers who have used the time to declutter and make a move. Buyers finally have time to look at homes during the week and not just on weekends.
- Immediate Real Estate Adoption of COVID Safeguards. Throughout the pandemic, buyers and sellers have felt safe. The industry quickly pivoted to virtual appointments and showings and requiring strict mask compliance.
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