A look back at 2020 & forward to 2021
Hindsight is 2020. U2 said it best in 1983 with the song, “Nothing Changes on NewYear’s Day”. People everywhere were excited for December 31, 2020 to change to January 1, 2021. But, what changed as we threw out our 2020 calendars? Well, here in Florida the number of out of state license plates changed on New Year’s Day. Which really isn’t a change, it is like any other year when our snowbirds return, and that is a welcome sight. Seeing all the license plates gives us a sense of normal. Another thing that didn’t change is the real estate market is still hot and this is true all over the country. This is good news! When people were asked to stay home, they started to see the space they call home differently. People decided to do something about their new vision of home and they went house hunting. Something needed to keep commerce stimulated during this abnormal time. The real estate market is filling a need, a “K-shaped” recovery of sorts. A real estate transaction isn’t just a house sale, there is so much more. When someone buys a house, they will then buy paint, they buy new furniture, appliances, decor, landscaping, and so on. They hire tradespeople for jobs they don’t want to tackle themselves. All of this keeps people employed and a segment of economy going. This provided some good news as we look back at on 2020.
Ray and I worked hard in 2020 for both house hunters and house sellers. The market was complicated, competitive, and filled with new rules to protect all those looking at homes and the homeowners. Because inventory was low our negotiating skills were greatly needed. We know people put their trust in us to give them professional advice, and we never take that trust lightly. "Nothing changes on New Year’s Day", and the 2021 real estate market has started the same way 2020 ended; strong and competitive. Ray and I are prepared for 2021. We are ready to work for all those who call asking us to make their real estate dreams a reality in 2021.
A look at the Real Estate Market
I know I keep harping on the fact the real estate market is hot. Well, here are some stats to support the statement. These two bullet points are for our Coldwell Banker Realty office alone...
Our office closed 1057 units in 2020 vs 952 in 2019
Our office closed $300,000,382 Volume in 2020 which is over 20 million more than 2019 WOW!!!!
Now a more broad look at the market. These stats reflect the average type home sale in the last 90 days and what is on the market right now. "Average" being a 3 bedroom, pool home with a two car garage with 1500-2300 square feet between the price range $225,000 to $350,000...
Sarasota County "under contract" average 21 days and getting 99.6% of list price. Active on the market 21 right now.
Manatee County "under contract" average 14 days and getting 99.7% of list price.Active on the market 12 right now.
Charlotte County "under contract" average 21 days and getting 98.9% of list price. Active on the market 27 right now.
To put in perspective, most of the time the average is more like 50-72 days to go "under contract"and 94% -96% of list price.
A look at Refinancing your current mortgage...
Deciding whether or not to refinance an existing mortgage typically means running some numbers. You can do this on your own, but it’s helpful to get the professional assistance of a loan officer. It mostly boils down to how much you’ll save each month, but there are other considerations.
First, the change in rate isn’t everything. Old school rules say that it’s a good idea to refinance if current market rates are 1% or 2% lower than what you currently have, but the rate is only a part of it. The other component is the amount being financed. For larger loan amounts, a reduction of only 0.5% might make sense. For smaller loan amounts, 2% may not be enough.
Instead, calculate the monthly savings and then divide that amount into the closing costs associated with the mortgage. The result is how many months it will take to ‘recover’ the closing costs in the form of monthly savings. Pay less attention to the actual rate but instead how long it will take to get your closing costs back.
Take a loan amount of $300,000 over 30 years with a rate of 4.50%. The principal and interest payment works out to $1,520 per month. If current market rates are at 3.5%, the new payment would be $1,347 for a savings of $173 per month. If closing costs were $3,000, then it would take just over 17 months to recover the associated fees. Not bad. If the loan amount were $100,000 under the same scenario, the monthly savings would be $57 and recovered in 52 months, or more than four years. Probably not a good idea in that situation.
There are other considerations outside of month-to-month savings. Let’s say you’re less concerned about lowering your monthly payments, and you’re more interested in paying off your house faster. In this scenario, it may make sense to refinance at an even lower interest rate on a 15-year mortgage. You’ll pay more per month, but you can potentially save tens of thousands of dollars over the life of your loan.
If you’re wondering whether a refi makes sense for you, reach out! We’ll be happy to answer any questions and can refer you to a mortgage professional when you’re ready to crunch some numbers.
Highlighting an area...
Instead of a town this month I want to highlight a couple fun things to do...
Treeumph: zip lines & bridges through the trees located just outside of Sarasota
Logan's River Tour: scenic and peaceful guided tour down the Myakka River
Solomon's Castle: an artist vision & yummy restaurant.
Myakka State Park and the beautiful canopy walk.
#MaryRayWestbrook