Living through a pandemic, hopefully, is a once-in-a-lifetime event. It forced us all to be shut-ins—not by choice, but by necessity. Not surprisingly, fashion styles became way more relaxed, orders for online shopping and home deliveries stepped up, and dogs and cats were adopted, leaving the usually over-crowded kennels empty. Another surprise was a resulting housing boom.
Incredibly in 2020, despite unemployment rates rivaling the Great Depression, housing prices surged to record highs. The peak unemployment figures during 2020, according to the U.S. Bureau of Labor Statistics, occurred in April when rates hit 14.8%. This is the highest unemployment rate since the Great Depression in 1933 when rates hit 25%.
Let’s take a look at three takeaways from the 2020 housing boom as covered in eXp Realty’s Thought Leadership Report, “2020 Housing Boom: Exponential Opportunity for the Real Estate Industry.”
A Virtual Workplace Drove the Market
Usually, when a huge market or global event happens, it drives the housing market in one direction or another. During the 2008 housing crash, unemployment rose to 10% and nearly 3.2 million properties experienced foreclosure. Millions of home values were underwater for years and the recovery was slow in coming. Even though the unemployment figure is much higher during the Covid-19 pandemic, people who are still working, are working from home. And they also have money.
This is where the “aha” moment happened.
“If I can work from anywhere, forever, where would that be?”
This new realization also reshaped the types of homes people wanted to live in.
But who, exactly, were the homebuyers? Millennials made up the lion’s share at 38%, followed by Gen Xers at 23%, young Baby Boomers at 18%, older Baby Boomers at 15% and the Silent Generation at 6%.
Home Prices Surge in 2020
Once people determined they could work from anywhere, this set in motion an entirely new mindset for home living. Commuting was no longer necessary, so the desire for a second home, or maybe a new primary home, was realized. People wanted homes with more space, a different configuration (office, a gym) or in a more desirable geographic location.
As a result, buyers flooded the market, driving up prices and snatching up inventory. The monthly median sales price of existing homes rose throughout 2020, starting at $266,200 in January to a high of $313,100 in October, according to the National Association of REALTORS® (NAR). For 2021, it is expected that buyer demand will continue, as will low mortgage rates. This will no doubt continue to shrink existing inventory. It is a seller’s market.
A Real Estate Career Is Not a Bad Idea
Real estate is an industry that needs people to help transact and connect homebuyers and sellers. Currently, there are 1,458,661 agents in the U.S., according to NAR. Even during the pandemic of social distancing and closed access to businesses, eXp Realty not only survived, but prospered during the 2020 roller coaster. That’s because eXp was one of the first—if not the first—brokerage that chose to discard a brick-and-mortar model and run virtually. That was in 2009 and the idea proved to be providential.
eXp agents can work virtually from anywhere using proprietary tools, technology and training. Combined with a competitive commission structure, rewarding revenue sharing model and stock awards, eXp continues to attract top agents around the world.
As a matter of fact, in 2020, eXp realized a 63% gain in agents joining in 2020–going from 25,423 agents at the end of 2019 to 40,313 at the end of 2020. As a result, it nearly doubled the number of transaction sides from 2019 to 2020, going from 130,627 closed sides to 237,049. That accounted for record volume as well, with eXp closing on $72.2 billion in 2020, as compared to $38.2 billion in 2019—an increase of 89%.
All of this data and more are available in eXp Realty’s Thought Leadership Report: “2020 Housing Boom: Exponential Opportunity for the Real Estate Industry.”
Download the report here.