2020: THE YEAR THAT HAD IT ALL
2020 was one for the ages. It had it all: A global pandemic, social unrest, an election, wild swings in the stock market, unemployment, historically low interest rates, and one of the hottest real estate markets in recent years. Despite its hardships, 2020 brought perseverance, focus, and even improvisation.
At The Group, we navigated the challenges and learned how to better serve our customers. We implemented virtual property showings, video tours, remote meetings, drive-through closings, and more. Countless precautionary steps were taken to maintain a high level of safety in our offices and business practices. We also doubled down on our core values. Our mission is to create a world where everyone prospers and our commitment to organizations such as Group Gives, United Way, and Neighbor To Neighbor has never been stronger.
We know where we live is truly a special place; we never take that for granted and are willing to do whatever we can to make it even more special. Now, more than ever, we should be grateful to have a place to call home. Home might be the house or condominium you own, the apartment you rent, or even the college dorm room in which you study. We understand that for many, this is not guaranteed. We are grateful and humbled every day for the opportunities we have to serve our community.
Despite the impact of COVID-19, historically low interest rates, lack of inventory, and surging buyer activity created a robust real estate market across Northern Colorado and the United States. People spent more time at home and the marketplace responded.
Now that 2020 is officially behind us, here’s a look back at the market statistics and trends that embodied this unforgettable year.
A MATTER OF INTEREST. Good news for would-be buyers. After a year in which interest rates plunged to historic lows – an average of 2.67% on a 30-year fixed mortgage as of December 31 – don’t expect much to change early in 2021. National experts are predicting that rates will hover around 3% over the first half of the year, before possibly ticking up slightly in the latter half of the year.
THE GREAT RESHUFFLING. It’s unknown how deep the economic pain from the pandemic will be felt in our area. Clearly, the job growth of recent years has stalled, but it’s evident that remote workers are moving to places like Northern Colorado for a better quality of life. Even if it doesn’t show up in jobs data, the so-called “Great Reshuffling” should continue to bring newcomers – and their incomes – to the region.
POLITICS AND POLICIES. In the wake of the 2020 election, what will change in government? Federal decisions about tariffs and income taxes, as well as local decisions about water costs and property taxes, can all be factors in housing demand. For example, Colorado voters recently repealed a law that kept property taxes low on homeowners. If property taxes rise, it could reshape how we talk about housing affordability.
AN EYE ON INVENTORY. Low interest rates and the pandemic-related desire for more elbow room coaxed many to move or get into home ownership – likely before they might have otherwise. One result? Expect those people – assuming they met their needs – to stay in their homes longer, keeping a lid on the available supply of homes for sale. It will increasingly be up to home builders to create the inventory we need.
A NEW PERSPECTIVE. Among the lessons gained from the pandemic is the importance of home. Without the lure of movie theaters, restaurants, concerts and health clubs, many Americans are embracing a slower pace of life and learning to love what home has to offer. It’s the type of event that could determine how future generations see the value of home ownership.
FOR SELLERS. All types of traditions are in flux, including the typical “selling” season in real estate. With both inventories and mortgage rates both so low, don’t count on the usual seasonal spike in the spring and summer months – demand is whenever the buyer wants it to be. Talking to a real estate professional can help you stay in tune to the best time to sell. And even in a market that favors sellers, we recommend keeping your house “move-in ready” by keeping up on repairs. You’ll see return on investment when you see multiple offers on your property.
FOR BUYERS. Sure, interest rates matter, but what’s most important for a would-be homebuyer? It’s the benefits of homeownership itself (building equity, no rent increase, etc.). Bottom line: it’s best not to sit and wait on interest rates. If you find a property that covers most of your needs (there is no perfect property out there) and it feels like you can call it home, then act on it. Also, be prepared: Competition for available homes is high, so get pre-qualified. And educate yourself on the marketplace. Working with a real estate professional can give you an edge over other buyers.
FOR INVESTORS. As housing values continue to appreciate, it’s fair to say that real estate remains a strong investment. Interest rates are friendly and with housing inventory so tight, there are plenty of renters out there to serve. But here’s a potential wrinkle in 2021: If you were considering a 1031 exchange – a law that allows you to trade one property for another without paying federal income taxes on the property you sold – you might want to move fast. A campaign proposal by President-elect Joe Biden would eliminate the 1031 benefit.
FOR BUILDERS. Consumers’ needs are changing. Be ready to rethink your floor plans to meet the workspace and school space requirements that homebuyers want in the wake of the pandemic. More homeowners want to veer away from open floor plans in favor of separation between activities. Many people also need to accommodate multi-generational living and new pets (2020 was a record year for pet adoptions.) Finally, think about larger garages. Is there room for rooftop racks for those kayaks and paddleboards? What about indoor recreation space?
GROUP PARTNERS' DESIGN TREND PREDICTIONS
- Quartz counters, painted cabinets, outdoor spaces.
- Gold is back, not so open floor plans.
- Stark white with black trim will start to fall away. No granite.
- Great office space and great outdoor space.
- More home offices and increase of finished square feet.
- Ranch styles with walkout basements, plenty of room for office/study hall/playroom.
- Home, pulling back from the open floor plan, subtle color is coming back, moving on from the modern farmhouse.
- Multi levels making a come back.
- Out with the white cabinets.
- Clean, lines, modern/minimal design.
- Families designing their home giving them the ability to work & learn from home.
- Larger homes, but that may change as the world goes back to work...we think working from home will not be a lasting trend.
- Lots of antiquated industrial so high bay, wide door popular.
- Multi-Colored kitchens.
- More farmhouse.