As we are nearing the end of summer and still dealing with the pandemic, many of us are contemplating what to do on a day-to-day basis regarding our homes as our needs and living arrangements are in flux. Over the past 90 days, I have observed several trends in the market that I would like to share with you. My hope is that this advice might help you make the best decision based on real world information.
There are several factors that can come into play when deciding to make a move. Let’s unpack some of these factors:
- Scaling down due to loss of income or job – This is happening across the state of Florida not just in Leon County. The urgency of getting to market quickly and at a competitive price is critical as the clock is ticking. Make sure your REALTOR® is leveraging Facebook ads to active home shoppers online to maximize exposure of your home.
- Scaling down due to early retirement – As a result of poor future revenue earnings, many companies are offering incentives towards early retirement. Adjusting to fixed retirement income can prompt a move. Moving from popular suburban areas to more rural areas can open more options at lower square foot pricing while being able to sell at high market levels of demand for in-town property locations.
- Scaling up due to work-from-home – According to many industry resources the amount of work-from-home employees has skyrocketed. Many companies are considering adapting to this for the longterm as it reduces overhead expenses. Incentives for work-from-home staff are in full swing. Homes with office space or fourth bedrooms are increasing in demand.
- Scaling up due to school-from-home – While Leon County Schools reported that only 30% of parents elected full-time virtual academy as their primary education format, the need for dedicated “school space” is a driving factor for families needing more space. This is so new to all of this and the stress can take its toll!
The impact of these driving factors has had significant impact on the Tallahassee real estate market. Digging into the data of these factors points to several trends:
- Multiple offers for sellers – Due to homeowners seeking to scale up combined with job loss and retires downsizing the housing market of homes priced in the $300,000 to $400,000 are seeing multiple offers.
- Rental property demand increase – Rental property market also is seeing a spike in need versus available inventory which creates revenue opportunity for homeowners with large equity positions to rent current residence and purchase second home or additional rental property.
- New construction and move-in-ready home demand increase – Due to limited availability of general contractors responding to flood of renovation projects for work-from-home and school-from-home, the demand for new construction and/or move-in-ready homes is surging. Additionally, homeowners are deciding against refinance loan or home improvement loan due to overall expense, additional closing cost, length of time to recoup expenses and home in disarray during the stress of pandemic conditions.
- 20 year low on new mortgage rates – As a result of the feds trying to stimulate the economy by lowering the federal rate, we are seeing nearly 20 year low for new mortgage rates with some interest rates below 3 percent!
We’re all going in different directions and are looking for that perfect answer as what to do next? My recommendation, at this point, is to sit down with your REALTOR® and your financial advisor to explore what is best for you. It’s still a Sellers’ market here in Tallahassee. For a buyer it is an excellent time to purchase with the all-time low rates. I work with several lenders that can help you with any part of the loan process and answer any questions you may have.
For further information or a free consultation feel free to give me a call.
Stay safe and enjoy your family!
Mike Ferrie
