by Jon Lyons
on Friday, January 8th, 2021 at 4:51pm.
That's a rap. 2020 is done, and so many are thankful for it. But in the year, let's not forget that so many blessings unfolded. Many made the move to the beach, moms and dads gained work freedom that will lead to healthier family time, and many of us have taken the time to reflect on the things that are more important that just another dollar. Here, the team at Live 30A has provided a reflection on the wildly-active real estate market here on 30A in 2020 including numbers, and an opinion of the what, why, and what to look for in 2021.
Did you know? We post our market reports on our social media channels: Instagram, Facebook, and Twitter. You can follow us @Live30A and @Live30Arealestate
A Deeper Look at the Numbers in the graphic
Pending & Sales on 30A
If you're a lover of 30A real estate and were one of the 2436 closings that happened on 30A this year (almost all happening since rentals re-opened in late spring), you know how fast things have been moving. Buyer demand for beach homes significantly increased since the virus's response began to change the way (and where) we do business, and made us all rethink where we want to be living, raising families, and retiring in this ever-changing world.
What these numbers are currently is showing us is at least two-fold: That 30A is quickly transitioning into a different market that what we've seen in the past, and that demand is still "pent-up" vs. supply.
Look out for our market reports in the first few months of 2021 to see if the pendings/sales begin to indicate some balancing in the market.
Average Sales Price
In any given year, a healthy real estate market should outpace inflation by a healthy margin. But when sales prices jump up to 20%+ increases in a year, there better be some explaining to do -- and often times, has everyone asking the same question... "Is this a bubble?"
Fundamentally - this shouldn't happen. But when a virus (among other influencing things, both negative and positive) change the way of life and business for thousands and thousands of people living in cities that love and vacation here on 30A... things change. As office spaces shutdown, workers became remote, families re-evaluated where they want to live (with new opportunities), and interest rates dropped --- moms and dads alike began to look to their vacation havens as potential part-time and full-time residences.
Takeaway: The prices are being driven by supply and demand. The demand (buyers) has increased significantly as potential buyers have been able to change the way they do work and where they can live. With an influx of thousands of qualified buyers love 30A and who can borrow money at low % rates, supply has not yet been able to keep up. Anytime this happens, prices will increase above normal.
Additionally, it should be noted that the changes in sales prices are not linear across the price spectrum or market. In Alys Beach alone (a luxury home community), over $300m sales at $3-8m each is influencing the market. Add in an additional several homes at $10-16m that sold in 2020, and your numbers will all appear to trend up a little more.
Total Gross Sales
$2,880,000,000 in real estate transactions occured in 2020 alone. Or put another way, $1,380,000,000 MORE total gross sales year over year. Again, if thousands of qualified 30A beach lovers and buyers enter the real estate market at relatively the same time, supply is going to take a hit, sales prices will increase as competition increases, and sales will increase dramatically until supply runs out.
Takaway: Adding Thousands of buyers contributed to nearly 800 extra properties sold on the market. Factor in the supply/demand and how that increased the sales prices, and boom -- another Billion in real estate was grabbed up in just a handful of months.
What to Look For in 2021
Still strong demand/competition, and new opportunities coming on the market throughout the year.
Buyers being more qualified and ready to make their purchases, in strong positions to negotiate or "seal the deal"