DOWN BUT NOT OUT
Greetings!
Hope you had a nice Passover or Easter, or at the very least, a wonderful weekend. Las Vegas was treated to an amazing show on Saturday from the World Famous US Air Force Thunderbirds. We got to watch them fly seemingly overheard. What a great experience. Wanted to jump into a quick comparison market of where we are vs. where we were for the last 3 months in terms of Market Activity.
The market has absolutely adjusted to what we have expected. March was a very strong month, both for closed sales and sales that went pending. However, many of the sales that closed in March were put into contract in February or January, with just a small percentage that were probably put into contract (Pending) in March with a March close. Those deals that both went Pending and closed in March were either done at the beginning of March, or Cash deals with quicker closes.
This is what we expected, so fear not. If you look at both the Closed Sales (Blue Chart) and the Pending Sales (Red Chart), we do see a dramatic drop off. Couple things to note:
April only represents 12 days of data, so not quite half the data we will expect.
I added estimations as you can see from the different color. This is based on extending the 12 days we have of data over a 30 day period.
If we even just extrapolate the data for April for the remainder of the month, we’ll be lower than we were in March, but not DRAMATICALLY so.
There are a few things that are NOT on these charts that I want to discuss. First, as shown above, our April numbers will of course increase from where they are on the charts, but even when we pull the data out over a 30 day period, we will see a drop. That is to be expected. However, it’s not a cliff. We are not at 0 Sales. The important thing to look at is not just the CLOSED sales, but the pending sales. The pending is what gives us a sign of what is happening in the market, RIGHT NOW. And as you can see, if the month continues the way it has (remember, we’ve all been ‘staying at home’ since Mid March), we should still have close to 2,000 PENDING sales that were consummated in April. That’s a very good sign that people are still looking to Buy or Sale, even during the Pandemic!
If you look at our Sales of Q1 for 2020, we are WAY AHEAD of where we were in 2019. For the first 3 months in 2019, we had 8519 total sales in our MLS system. For the same time frame this year, we had 9910! In April of 2019, we had 3822 Sales. Clearly, we won’t have that many this April, but if the chart holds, we should see about 2000 in April. For PENDING sales, we saw 4053 homes go into contract in April of 2019, and again, with the data we have, will expect about half that for this April. Not great numbers by any means, but still, we are not at ZERO. Things are being put into contract. Buyers are still looking, and sellers are still selling. If you don’t believe me, take a look at the numbers… they don’t lie.
The last point for today is NEW LISTINGS. This is the ‘sign of hope’ if you will. People that are choosing to list now, in the midst of this Pandemic. In April 2019, we had 5806 NEW Listings hit the market. I’ve been tracking things on a daily basis since this all started, and for the first 8 business days (most new listings hit the market M-F), we have had over 1000 new listings hit the market, during COVID-19, when people are staying home. This will adjust and I would expect about 2500-2800 new listings to hit in April. Again, we’ll be down about 50% over last year.
So why do I view this as exciting news? People are still doing what they need to do. We are (HOPEFULLY) doing our best to FLATTEN the curve. Depending on the reports you read or listen to, we are AT or CLOSE to the peak of this, locally. It’s a scary world out there, but we are doing what we need. Don’t get me wrong, 50% drop from year to year is a BIG Drop off, but what if it’s just April that’s affected? Or April and May? Long story short, our Rebound is going to be sooner than later. The market will adjust. If we still have half the levels we did LAST April, what can we expect when people feel better about moving around, or going out in public? Numbers will increase.
Ive said this often. Real Estate is a Safe Haven investment. Now, more than ever, that is true. People have been spending so much time in their homes, it’s only right that we should see the Housing Market rebound and return to something that at least resembles a normal market. Again, if you don’t believe me, believe the numbers…. they are there!
What are your thoughts on this market?
-GZ