2020 has been a rollercoaster - as far as the US real estate industry is concerned. Leading markets in the country have witnessed record-low mortgage rates even as buyer demand surged consistently. There also was a wave of relocations across the country, which pushed home prices in many states including New York, California and Florida to unprecedentedly higher boundaries.
New York City, the ‘city of dreams’ is of great interest to foreign buyers. New York City has been (and still is) the coronavirus epicenter creating an increase in the number of people relocating to the city’s suburbs. This has led to a hike in home prices in the suburbs and a slight dip within the city center. Brooklyn saw the highest spike in home prices as of December 2020 while Manhattan experienced the biggest dip. NYC is a very promising foreign buyer’s market and all indications forecast that it will continue to be so, in 2021 and beyond. There will be a higher supply for homes than there are buyers. When supply outpaces demand, foreign buyers will continue to enjoy the upper hand in price negotiations.
How competitive will the NYC real estate scene be going forward?
Over the last decade, NYC has experienced a steady house appreciation rate of 3.97% every year, on average, according to stats from NeighborhoodScout.
2020’s average rose to 4.68% while the median home price appreciation was about 28.24%.
The median home price in New York City was $645,143 in December 2020 up from $624,000 as of December 2019.
Experts argue that the fact that the market remained strong and stable through the pandemic is a good indication that 2021 will be a good year for sellers. The pandemic might have dramatically changed the dynamics of Manhattan, Brooklyn, and Queens’ real estate markets, but the overall market has been relatively unscathed, and is still appealing to foreign buyers.
The rapid relocation of NYC residents during the pandemic has also greatly affected rental property management in the city. Landlords are now struggling to keep pace with the constantly-changing property rental scene, from attracting prospects to satisfying existing tenants. That has increased the importance of partnering with an NYC property management company.
Property management companies are independent contractors who help landlords to market their rentals - especially during the uncertain coronavirus times, handle maintenance and repair, address complaints from tenants, help maintain cleanliness and hygiene, and collect rent. They also evict rogue tenants, saving landlords time and worry.
Property management companies are of great help, especially to foreign buyers who might not be familiar with the legal procedures and will have experts taking care of them.
Despite high unemployment rates across the state of California, the real estate market in the region closed strongly in 2020 with a sales-price-to-list-price ratio of 100.5%. That was up from 98.4% in December 2019. In 2020, based on data by the California Association of Realtors (C.A.R.), the state recorded more than 500,000 home sales for the first time since January 2009.
A strong 2020 implies an even stronger 2021, now that the statewide economy is gradually opening up. C.A.R forecasts that home prices across California will rise steadily by 10.6% from January through October 2021. The pandemic is projected to continue suppressing interest rates, which will benefit foreign buyers more than sellers.
California’s median price hit $640,330 in 2020 and might continue to rise at a steady 1.3% rate over the next 12 months to $648,760 in December 2021.
Mortgage rates are touted to drop from 3.2% to 3.1% while unemployment rates across California could drop from 10.8% to 9.0%, with both realities expected to fuel price growth.
The overall market is currently a strong seller’s market due to a limited supply of homes in major markets in the region, notably Miami and Orlando.
The average sale price of single-family homes in the state of Florida was $284,000 in 2020.
Home prices will, therefore, keep rising in 2021 despite the ongoing pandemic, from 7.1% in 2020 to 10.1% by the end of 2021. High home prices will also be favored by the consistently dropping mortgage rates.
The coronavirus pandemic has brought uncertainty to the economy, job markets, and residential preferences across the U.S. but 2021 might be the best time for your clients to list their home.
Help your foreign buyers to find the most affordable prices. Don't allow the global pandemic to interfere with their success - and yours!
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Joseph Canmore is a freelance writer. He has an interest in interior design, home remodeling, and anything pertaining to real estate. In his writings, he tries to share information along with his personal experiences.