Residential Real Estate Council Annual Meeting
Last week the Residential Real Estate Council held its annual meetings, gathering its members, called CRS designees.* As a volunteer member of the CRS Education Mastermind Committee and as a new appointee to the Maryland RRC Education Leader position for 2021, I made sure to attend. These meetings usually coincide with the National Association of Realtors fall meetings and were originally scheduled for New Orleans before the COVID-19 pandemic disrupted our plans. Instead, the meetings were held via Zoom.
The Trends
Vince Malta, President of the National Association of Realtors, was a special guest speaker and provided a trend forecast for real estate in 2021. Among his important points were:
Nationally, the average home price topped $300,000 for the first time.
Vacation home sales are up 34% over this time last year, a notable spike caused by the pandemic.
Inventory is short across the country, with 19% fewer homes available than last year. COVID-19 is causing many people to remain in place who might otherwise decide to move.
The country has recovered more than half of the jobs lost during the pandemic and that number is trending up.
Commercial real estate sales are down 70%, but there is modest optimism for the recovery of this sector, in part due to the potential for conversion to residential apartments which would address some of the inventory shortages.
Housing is slightly less affordable than last year. Prices rose, but interest rate decreased, offsetting the difference.
Mortgage interest rates are still the lowest in history.
First time home buyers make up 31% of the buyer market, with only a two percent decrease compared with last year.
A positive indicator for home affordability, construction starts are up 8%, so more inventory is being built to serve the need.
My Local Take
In Maryland, the spring buying season accelerated due to the pandemic. Properties already under contract were rushed to completion whenever possible, out of fear state services, vendors, and citizens would be on lockdown and buyers would lose jobs. A complete quarantine never quite materialized in the state of Maryland, so while the public paused, transactions continued, albeit with complications, restrictions, and (thankfully) innovation.
The Anne Arundel County market has remained competitive for months, with a shortage of local inventory in low and mid-range price points. Buyers have had spare time to look at the inventory and at the flaws of their current living situation. Interest rates have remained low, so for those not concerned about job loss, a move seems appealing.
On the commercial side, in over 16 years living here, I’ve never seen so many empty spaces. From the various business parks around the county, to Main Street in the Historic District, and to the saddest of all, the Annapolis Mall, commercial real estate appears to be hurting. That said, the Annapolis Mall has been in decline for years, and while other shopping venues in the region have kept up with the times, the mall leadership has done a poor job of responding to changing demand. IMO, the current “highest and best use” of the Annapolis Mall complex would be its conversion to a mixed-use, affordable residential project, alleviating some of the inventory pressure in the residential market. Let’s see if this town that’s mostly stuck in the past, yet the seat of a county bursting with technology and innovation can make something interesting happen here.
*Note: A member of the Residential Real Estate Council (RRC) who has earned an additional real estate education and performance designation is called a “CRS.”