MAR 2021 - MARKET UPDATE
JASON’S “REAL TALK”
The market story is largely unchanged from the last few months. The basic story is still low inventory and strong demand, which is being fueled by low interest rates and a rebounding economy. The absorption rate stayed at historic highs in January. Absorption rates for single family homes were 105%, and 52% for condos and townhomes in January. We continue to see multiple offers and bidding wars on almost every move in ready property that hits the market.
Commercial real estate continues to rebound, albeit unevenly among the sectors. Industrial and Multi-Family continue to lead the market with softer conditions for large office space and retail. We continue to see growing economic activity in our market that has been building since the fall. The new year has accelerated that trend and we are seeing increased interest on our commercial listings. We’ve seen the most activity in the industrial space, but retail and restaurant activity came roaring back over the last two months. We continue to remain bullish on the long-term prospects of St. Pete, and Tampa Bay more broadly.
We continue to watch the broader economic activity and the pandemic. We are hopeful on both fronts. As mentioned above, vaccinations are going out in larger and larger quantities. Another vaccine, Johnson & Johnson, was approved this past week. The Biden Administration announced yesterday that every adult would be able to get their first shot by the end of May. The vaccinations combined with warmer weather gives us hope for the Summer and Fall. There is a lot of pent-up economic demand waiting to be unleashed once we get the virus under control.
On the economic front we see a few different stories unfolding. Congress looks ready to pass a $1.9 Trillion dollar which will certainly help to stimulate our rebounding economy. The Federal Reserve is committed to keeping interest rates low even with some potential for rising inflation rates. The 10-year Treasury, which is what mortgage rates loosely track, has started to rise. Mortgage rates have slowly risen as a response. The stock market has started to dip with some stocks entering bear territory, but most experts think it is a needed correction. The stock market mostly affects the luxury single family market and the investment property market.
