This year has simply been bonkers. And we still have over a month to go! The news of Kobe and Gianna was swept away by the tsunami of events that followed: the pandemic, wild fires, COVID-19, spiraling deaths, impeachment of the president, civil rights protests, stock market crash, record unemployment, out-of-control business failures, the lockdown, supreme court battles, and the list goes on! On a positive note, we will soon have our first female/black/Indian vice president, and THAT is worthy of celebration.
Add this to the list of shockers: real estate in South Orange County had an outstanding year. This, in spite of sheltering in place for a third of the year, the fact that open houses were banned and fewer homes being offered than any time in recent memory. The restrictions for showing a property seemed destined to doom the market. Real estate professionals thought the end was nigh. Nope. Buyers took in stride having to fill out a multi-page disclosure form for every showing, wearing masks, surgical gloves and booties, as if entering the operating room. They were undeterred. New listings that were reasonably priced and showed well routinely generated multiple offers within the first few days on the market. It became a ridiculously lopsided sellers’ market.
To put it in perspective, here’s a year-over-year snapshot of the coastal market in South Orange County (Newport Beach to San Clemente):
- Unit sales rocketed 11% from 4,242 units to 4,725 units;
- Prices increased 6%;
- Average sales price went from $1,599,904 to $1,696,440;
- The size of homes increased about 3%.
These increases took place on top of what was already a strong year in 2019. So, what caused this feeding frenzy in the midst of a pandemic and the worst economic crisis since the Great Depression? Well, interest rates, obviously. When people could get a 30-year fixed mortgage with an APR that starts with a 2, that is downright compelling. The other reason may be that people simply came to the conclusion that they are going to be spending a lot more time in their homes in the future (does “remote learning” or “home office” have meaning to you?) and decided to find a better place to domicile. Whatever, it still came as a surprise to many of us. But then again, this is 2020.
If any of this is of interest to you, we absolutely love doing specific analysis for our clients. Please call on us to sift through all the noise and come up with a genuine plan.
From all of us at Cove Canyon, we wish you a safe and joyful holiday season and hope that 2021 has fewer surprises. Finally, our heartfelt thanks go out to all the essential workers who continue to get us through this mess and condolences to those who have suffered losses this year.