Ever since Covid-19 hit people have been speculating we would see another wave of foreclosures hitting the market. Experts talked about how many homes were utilizing mortgage assistance and how this would impact the market in the future. We see distressed sales practically non-existent in 2021 and going forward, and we’ll explain why.
In June, we had 0 short sales and 3 foreclosure sales out of 1,748. That’s about 1/10th of 1% distressed sales.
Those reported numbers of consumers in forbearance were overblown. We did not see those kinds of numbers. For those that did use forbearance, many have caught back up with their mortgage servicer. Furthermore, some people filed for forbearance as an additional tool for mortgage relief not knowing what Covid-19 was going to do to the economy.
Next, the media speculated that as people lost their jobs, those caught paying high prices would be susceptible to a real estate correction. This simply is not true either. Closed sales in June were up 40.6% while cash sales were up 149%. More people are paying cash or putting substantial down. Unlike 2006, people have equity in their homes regardless of what the market does.
Secondly, we have end users for every home. Back in 2006 we had flippers who built homes to flip to the next person without an end user in sight. Today, you can hardly find a resale or rental. Not only do homeowners have more equity today, but demand has also never been higher.
Covid has changed the way people think about their living and work choices. More people have decided to exit the city life and move to the rural and less densely populated areas. People have decided they can work from home, and they rather enjoy it. Florida has become a popular destination for the work from home crowd. If you are going to pack up and move, why not move to a low-tax state with beautiful weather?
When the market shifts, and eventually it will because all markets shift, we do not believe this market will be in trouble. Most people vision real estate markets going up a cliff then straight down a cliff. The reality may be our market heads up for a period, then levels off when it reaches an affordability point. What happens after there is anybody’s guess. The market could stay level, generally rise slowly along a bumpy road, or decline slowly along a bumpy or uneven road. Supply, demand, and affordability will one day drive the market.
Right now, demand outweighs supply. We still have more people that wish to move here than leave. Interest rates are low, and even for many locals the market is still affordable. For out of state buyers, Florida seems like a bargain compared to where they are coming from.
Real estate values are all about perspective. To a buyer that looked 2 years ago and did not pull the trigger, we look high priced. To a new buyer shopping from out of state, we look like a bargain.
We do look for the end of the eviction moratorium soon. We believe this has placed an undue burden of renters as it has taken supply out of the market. Once landlords can evict tenants not paying rent. More rentals will come back on the market and open opportunities for other renters.
Property to Sell?
Do you have a property to sell? Are you wondering if now might be the optimal time to sell? Talk to Sande or Brett Ellis at Keller Williams Realty 239-310-6500 We can discuss your options. Our marketing reaches out of state buyers willing to pay Top Dollar for your home. We have a website www.SWFLhomevalues.com that will give you an instant price estimate of your home. Our system will email you every month your new price so you can keep track of your equity position the market’s direction.
Always call the Ellis Team at Keller Williams Realty! We are here to help.