The weather has been chilly. However, the real estate market has been hot. This week, we’ll talk about the seller’s market we see right now and then take a look back at the last year of the pandemic.
Anyone perusing real estate ads, buying or selling a home, can see that it’s a seller’s market with houses going quickly and over asking price. Prices are up because supply is down, and mortgage rates have been historically very low! Mortgage rates, although rising a bit, have yet to dampen the housing market.
Those of us who remember the 2006-2008 run-up in the housing market that led to the Great Recession might be nervous, but this one is different. Part of the 2009 crash was banks approving people for unreasonably large mortgages. That isn’t happening this time. In fact, people are paying for the houses in cash or putting 50% down payments. Plus, the supply is tighter, which is supporting the higher home prices. So, this seller’s market isn’t the same danger to the economy. Unfortunately, it could mean that buyers are paying more for the house than it’s worth over the next 20 years, so that is something to consider for those shopping for homes.
While we’re talking real estate, remember that if you are participating in the market these days, the 1031 exchange for investment property allows you to sell an investment property and buy another without paying taxes on the money. If you have questions about that, give us a call.
Last year was historic for many reasons, and not just the housing boom. The COVID-19 pandemic has changed the world, but some good things have happened, too. Let’s take a look:
- The stock market did great. The S&P 500 has climbed over 50% in the past year, and the Nasdaq jumped 75%. Stocks for companies focused on at-home life did great, but travel-related stocks did as well.
- Some companies hired many people, including Amazon, which hired an average of 1400 new workers a day in 2020.
- We saw many new businesses emerge–487,577 to be exact.
- We saw virtually no influenza
- Many people were able to learn more about themselves and focus on personal improvement. Some realized that they prefer to work from home.
- We discovered vacation spots nearby that we might have overlooked otherwise. Many of us have been able to find new workout routines, connect with others in new ways, and even learn new skills.
We hope 2021 is treating all of you well so far and that you’ll have a terrific year as more and more people are vaccinated, and we can safely resume more social and professional activities. As always, let us know if you need anything at all.
Past performance is no guarantee of future results. Securities offered through Triad Advisors, member FINRA/SIPC. Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Obsidian Personal Planning Solutions, LLC, and Obsidian Personal Planning Solutions, Inc, are not affiliated with Triad Advisors.