Some Trends in Real Estate Over the Past Year
Here are some thoughts about real estate trends over the past year.
The pandemic changed the way we live and work. Since March 2020, the majority of real estate buyers in my community of Greenwich, Connecticut (28 miles from midtown Manhattan) came from New York City and other highly populated communities like Brooklyn searching for open green areas, homes with workspaces, and locations closer to friends and family.
Having recently participated in the Sotheby’s Global Networking Event (GNE), where I had the opportunity to meet and speak with agents from around the world, it is clear that this is not just a local or national trend but this same migration is taking place globally. This is a historic and unprecedented event.
Besides looking for fresh air and distance from neighbors, today’s buyers prefer lifestyle over commuting to high-paying jobs. Buyers everywhere want home offices with all the bells and whistles, schooling areas for their children, home gyms, or in-home fitness facilities.
We’ve also seen an increase in demand for environmentally friendly homes containing energy-efficient systems and houses that leave a low carbon footprint. Buyers looking for elbow room and green homes look for thermal or solar power versus gas or oil which, if you can believe, we still use in this part of the country! They want highly insulated attics, windows, and doors. Newly built homes are using more Hardie plank siding or Azac versus all wood. They’re also favoring locations close to public transportation to major cities to reduce emissions.
As of the writing of this article, across the nation buyers have to move fast. In August the median sales price for a single-family home in our town was $2,025,000, the average Days on the Market was 77 and sellers received 98.8% of their asking price.
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If financing is required, pre-approvals are not enough. If a buyer needs a mortgage, they need to have a precommitment from the lender. Many transactions, however, especially at the higher end are all cash and have little to no contingencies. These are the winners.
Sellers need to be cautious. Although inventory continues to be low with only 3.6 months of supply in Greenwich, they should be aware that some buyers may hold off until the Spring market if they feel a price is too high. Locally, July saw 173 sales while August had 111 and though this decrease is typically due to summer vacations, the number of weekly sales since that time has also softened.
Digital negotiations are the norm since the world was turned upside down. Out of need, the lockdown forced many agents (and consumers) to transact online and learn new platforms, many of which had been available prior to the pandemic but had been underutilized. Yes, in my opinion, the pandemic was a good thing for a number of reasons.
The digital economy is here to stay. We’re not going back to closed and crowded office spaces any time soon. Let’s face it, commercial leases cost a lot of money, especially in Greenwich, and having seen how well agents performed over the last several months, I hardly think any real estate brokerage firm is going to increase their physical office space.
While I can’t speak for other agencies, Sotheby’s had a record year in 2020 despite agents working from home. 2021 has already outperformed last year. YTD sales are up 49.8%. This all happened with agents working remotely.
Transacting online is good for the environment. It means less paper usage and more trees, less electricity consumed, less traffic, and fewer carbon emissions.
Working online offers countless opportunities for ingenuity in selling properties, especially as far as marketing. While I can’t confirm, two agents at Global Networking Event claimed to have made sales as a result of live video tours, without the buyer ever stepping foot into the property.
Buyers and sellers can do a lot online without the use of a realtor but they cannot see the pitfalls that only a seasoned agent can point out based on years of experience. An accomplished negotiator is invaluable. Only a professional with many closed transactions under their belt has the ability to overcome industry obstacles. This comes with time-tested proven results and no digital platform can replace this.
Let me know how I can help with your real estate goals.
