This is Part 1 of my full 2020 Market Report – to receive the full report directly as a PDF contact me.
This year has clearly been a whirlwind of – unique occurrences, but despite all that’s happened one fact remains – people want to be in Southwest Florida. These times are truly unprecedented, and we’ve been tracking things closely through our digital tools. The Southwest Florida market is experiencing record low inventory and record low interest rates, absolutely unbelievable high buyer demand (with many from the Midwest, West, and Northeast currently searching frantically for homes throughout our region, a fast growing builder’s market, and overall increasingly high pressure on pricing as we hit an all time high US median home price.
My conclusion: this perfect storm of macro economic and micro-economic events along with rapidly changing political discourse means this is truly a unique time to be in the Southwest Florida market, particularly ripe for sellers.
This market update provides in-depth analysis and information from our market – including trends, and other variables related to the real estate industry I gladly offer my research and analysis to former, current, and potential clients as a service for doing business. Real estate is my passion, and I’m combining that passion with my experience and love of my clients to help bring these insights to you!
Macro Real Estate & Economic Trends:
Economy: Although we’re officially out of what’s been considered the deepest recession in history with an initial drop of 33% in GDP during the 2nd quarter of 2020, then a staggering rise of 33.1% in the third quarter – volatility has become a real concern. Currently, Real Estate represents 20% of the overall GDP and is the current backbone of our economy, and has remained unaffected by the larger macro-economic trends. Although I’m no financial advisor – based on my own personal interpretation of what’s going on, in studying history and economics, we may be in for an initial deflationary period. After that it most likely will be followed by an inflationary period (due to fed monetary policy), with some large-scale monetary policy concerns affecting many consumer goods and other commodities, ultimately I believe real estate will continue to be one of the most valuable safe-haven asset classes one can be diversified into.
The Fed has started to finally consider “helicopter” money in the form of fed accounts for average individuals into which COVID relief moneys will be placed. There is also talk of a wholly digital dollar, as well as negative interest rates (which have proven disastrous in both Europe and Asia) as well as an exploding deficit. If initial purchasing trends continue some luxury goods markets (boating, RVs, luxury goods) will skyrocket in the short term – while the economy slows, until inflation begins to take off as the result of the monetary policies that have been put in place to “stop the bleeding.”
Luxury Market (1mil+): Affluent clients are finding much comfort investing in SWFL real estate. With our extremely low property taxes, exceptional property owners’ rights, low taxes, and expanding state-economy, coupled with a desirable political climate for many – we’re seeing increased activity from many places, notably the Northeast.
This sector of our market has doubled in closed sales when compared to the 30 day average for all of 2019 which was 156 closings. In the past 30 days we’ve seen 325 close (up over 200%) with another 386 go pending (up nearly 250%) with a majority of sales occurring with CASH! In times of economic uncertainty, stock market volatility, and inflationary risk, real estate tends to perform well, especially when combined with lifestyle changes as a result of COVID.