There is a lot of uncertainty about what the full impact of COVID-19 will be on our country and on real estate specifically. Many of my clients and friends are asking me about the market. Here is an insight into the real estate market. Let’s look at where we were mid-March, where we are now, and where we are going. I believe that giving you regular updates on the market will give you confidence, a sense of security, and the tools you need to make the right decisions for your family.
Where Were We
- Complete utter upheaval: Degree of shock factor, how dangerous is the virus.
- Fear, uncertainty, confusion set in.
- As Realtors, our industry was thrown into chaos, as Buyers and Sellers called in droves saying they are delaying their move. In our industry which is so face to face, we went into a tailspin.
- Restaurants and other businesses were completely ravaged the first couple of weeks.
- Unemployment numbers grew week by week.
- Thousands of homes in our area never came on the market since mid-March or were taken off the market since this pandemic began.
Where Are We Now
- 30 million+ filed for unemployment (18% of workforce).
- Lots of temporary programs created to help replace lost income.
- We need to open the economy back up and we need to be smart about timing to make sure we are flattening the curve and not risking a second wave.
- Restaurants and other businesses started to minimize their losses by offering takeout, curbside delivery, and online options.
- People are sitting at home and are going stir crazy and are in increasing numbers planning to make a move in the next 90 days.
- Record low interest rates of 3%.
- Over the last two weeks, we have started to see an increase from clients saying they are getting closer to making a move.
- More homes have come on in the market in recent weeks.
Where Are We Going
- The Summer is likely to be the new Spring.
- Buyers are slowly coming back to the market and are disappointed with the low inventory.
- 70% of the workforce has stable employment and are looking for the right home to meet their needs.
- 35% surveyed of 112,000 households across the USA are planning a major remodel in the next 90 days.
- Sales activity will be down about 8% which is pretty acceptable because of the 2+ month pause.
- Into 2021, with all of this pent up demand sales may increase by 15% and prices rise 3-5%.
How has the real estate industry responded?
- As soon as this pandemic began, real estate companies, like mine, brainstormed how to do real estate in these challenging times.
- 70% of agents immediately stopped doing open houses and moved to virtual ones, like we did.
- We wear masks, gloves, carry hand sanitizer and control access in homes including instructing people not to touch knobs, handles, etc.
- In many respects, it has been safer purchasing and selling a home than it has been going to the grocery store.
Here are some other steps we have taken to keep sellers and buyers safe during this time.
What’s true about the market?
- States like ours, where the real estate market wasn’t completely shut down, have seen an only moderate decline as compared to states like Pennsylvania and Michigan which their governors basically shut down.
- The industry is still a sellers market. The demand for homes far exceeds the supply causing an increase in prices often because of bidding wars.
- Buyers are usually not getting a discount on homes.
- 3% interest rates are historically low.
- We expect a flurry of activity when the stay at home orders are lifted and the military order reassignments open up which could be in a couple of weeks.
- Across the nation, March sales were down 8% in March and new under contracts were down 20%. This is mainly due to having far fewer listings and buyers taking a pause.
- Buyers and sellers are not out of the market, they are just delaying the entry point waiting for the all-clear signal from the governors. In states like Texas and Georgia where restrictions have been lifted, we are seeing a huge increase in listings and buyers are more excited with more inventory choices.
- For the last several weeks, the National Association of Realtors (NAR) has surveyed close to 100,000 Realtors. This is the latest survey https://www.nar.
realtor/research-and- statistics/research-reports/ nar-flash-survey-economic- pulse. Key discoveries:
- 55% of sellers have put off their plans to move by two months.
- 45% of buyers delayed their plans by 2-3 months.
- There is very little panic among sellers with price. What they were listing pre-pandemic is the price they are listing now with no discounts to buyers.
- Buyers have adjusted their search criteria for home features. Most common were home office, yard, and more space to accommodate an older adult, new baby, or pet.
Source: Dr. Lawrence, Yun, Chief Economist of the National Association of Realtors (NAR)
I am sharing this with you because I care about you and I want to make sure you have accurate information so you can be informed and make good decisions. Do you need to refinance? Have you outgrown your home? Have you thought about doing a remodel?
If you have any questions about this information or what the trends we are seeing might mean for you and your real estate goals, I’d be happy to discuss with you.
Be blessed and be well!
Steve & Sarah
We all need Some Good News.