Central Ohio Real Estate Update | December 2020
The year 2020 has been a rollercoaster of ups and downs. What started as a seemingly normal year quickly changed course into what has become, perhaps, the most turbulent we have experienced in this country since 1945. Contentious race relations, a tumultuous presidential election, and, of course, a worldwide pandemic have made for (to play off the words of FDR), a year that will live in infamy.
Yet in spite of everything, the real estate market has not only trudged onward but actually thrived in the wake of pestilence. It's hardly worth mentioning yet again, but we experienced massive year-over-year improvements in all of three key real estate metrics - sale price per square foot (+9.4%), days on market (-9.7%), and list to sale price ratio (+1.1%). The main factor driving this trend is low inventory. COVID-19 has disproportionately impacted sellers more than buyers thus reducing the number of homes for sale.
As the year comes to a close, a new vaccine is being rolled out instilling a sense of optimism in us all. Nearly 2,800 new homes hit the market in November, a 12.7% increase over last year, and a far cry from the double-digit decreases we saw in previous months. Despite the influx of new listings, we still have a ways to go make up the inventory deficit we've been running since March. November closed with just 2,591 active listings, 45.3% less than November 2019.
This unique market has not only shaken up home values, but it's also impacting the way we live. The two main trends we've seen so far are a flight from urban centers and a desire for home offices. At this point, we can only speculate on the long-term impacts of COVID-19 on home design trends - but I'll do my best to take a stab at it.
The first trend that I believe is here to stay is having a flexible workspace in the home. We all know about the work-from-home phenomenon. For some of us, WFH is here to stay, yet for others, it's back to the office once COVID ends. Yet the zeitgeist of the 21st Century has forever been changed now that we know working from home actually works. You may go back to your office in 2021, but who's to say your company won't adopt a work from home policy in 2023 or 2024, or at a minimum, allow you to work from home one day a week? This trend will continue, making home offices a desirable amenity. But it's not only home offices - home gyms (or at least space for a yoga mat and some free weights) or a homework room for the kids are other examples of how a flex-room could be utilized. The flexible workspace is here to stay.
Another trend I suspect to take off in the coming years is migration towards small cities in beautiful settings. We all people are leaving San Francisco and New York in droves for places like Boise, Nashville, and yes, even Columbus. But why limit oneself to large metro areas? I predict the next boom markets will be small cities located in the mountains, on the coast, or near National Parks. Cities such as Roanoke VA, Moab UT, Asheville NC, and Knoxville TN. Not only are these places beautiful, but the cost of living is dramatically lower than that of big cities. Look out for places like these to explode in the coming decade.
Last, but not least, I anticipate a trend towards living off the grid. Not in the extreme sense, but just a general desire to live more independently. This includes solar panels, wells, and home gardens that enable us to rely just a little less on the system. If there's anything 2020 taught us, it's that the system that we used to take for granted is, perhaps, a little more fragile than we thought. Fortunately, the only thing we ever seemed to run out of was toilet paper, but who's to say it won't be something else next time? I think the likelihood of a complete system meltdown is slim to none, but I suppose a perceived feeling of vulnerability can't hurt.
So there you have it - a few predictions for the future, which may or may not come to fruition. With all that said, I wish you all a happy new year. May you make the most of 2021!
Columbus Area Housing Market Statistics, November 2020
Data by Columbusrealtors.com