Your Glass is Half-Empty!
I get it. Things have been rough. And for some of us, rougher than others can ever imagine. Maybe you were furloughed, or you lost your job in its entirety. Again, my thoughts are with you and the MILLIONS of people who have filed (hopefully temporarily) for Unemployment. The numbers are shocking, but numbers that we expected to see, unfortunately.
The biggest shock to this of course was the sudden surge. But if you’ve read anything I’ve been writing for the last 8 weeks, we knew the sharp downward pressure on the economy (or upward on unemployment) would be unprecedented. This is something we have never experienced before. The population is so much larger now than it was during the Spanish Flu from 100 years ago. The Great Depression that started in 1929 with a stock market crash, really took years to reach bottom and a long recovery. This is different and we know it. The hope, of course, is that what goes up, must come down, and we are hoping for the V-Shaped recovery that I discussed here: V-Shaped Recovery Blog
As high as this number is, and we of course can see it going higher, it’s still much lower than what unemployment was during the Great Depression, as shown below.
Real Estate Related
Anyone that will ‘guarantee’ things are going to go one way or another is not being honest with you, nor probably themselves. We are living with something that has NEVER happened. We’ve had recessions. We’ve had depressions. We have economic models for both of these, and we have been able to study them. We don’t have models that can predict what will happen in 2020 with a world-wide pandemic in terms of recovery, and Real Estate.
Sellers
If you NEED to sell, I always say we don’t know what’s going to happen tomorrow, but we have a good idea of what is going to happen today. If you need to sell, and feel things can or will get worse, let’s talk. We can help you get your home sold QUICKLY, and still get you top dollar for the home. Sellers are not dropping prices like crazy at this point, and if the home is priced CORRECTLY, with our marketing, we can help you sell and free up your Equity! It’s that simple.
Buyers
If you feel the market is over priced, and going to plummet; I have no concrete, 100% valid answer of why I don’t think that’s going to happen, because the theme, as I have said, it that this is a time that we have never seen before. However, I do know there are going to be some homes that have opportunity.
For example; there was a home that was a full remodel in a beautiful Summerlin gated community. It was originally listed in January for $750,000, which even at the time, I felt was a bit ‘bold’. I showed it at $750,000 to some clients that really liked the home. It then dropped to $735,000 and I showed a second set of clients the home. I thought it was closer to $700,000 in terms of value, and they agreed. Then COVID took over, and my clients, who loved the home, decided to back away due to a job situation. I watched the home drop to $699,000. This past week, I noticed the home did sell in April… for $665,000! That’s a full $85,000 BELOW the original asking price.
Now I will say the caveat here is the home was a flip; the seller needed to cash out and get the equity back, and basically sold the property probably what they had into the home. My guess is they took a 7-8% LOSS on the property as they had to pay closing costs, etc. So, for the buyer that was able to buy this home at $665,000, they’ll be in INSTANT equity, and even if the market does drop a bit, they are protected. While this is not a normal situation as I alluded to, opportunities are out there if you’re constantly in communication with your Realtor.
By the Numbers
Real Estate did take a dip in terms of sales volume and price in April. That much we do know. The number of sales in April declined by about 40% from March, and was down about 33% from the prior April. Pricing declined as well. We saw the Median Single Family Home price drop from $319,000 to $310,000, a 2.8% drop, in one month. However, that was the second month to month drop we had in 4 months in 2020 already, AND pricing in April was UP from April of last year. Those are cold hard fact numbers.
Glimmer of Hope?
Currently, as of 5/11/2020 and through the first 442 Sales of the month, we have a Median Home price of $315,000 - which would still be down from March, but the downtrend has been cut in half! If we finished the month at $315,000, and this is still too early to call May, that would be a month over month INCREASE of 1.6%. I do not have a visual for this yet, as again, this is based solely on 6.5 Business Days worth of Data (Sales can only close M-F).
Where are we Going from Here?
Things are unpredictable. We know that, and we understand. There is a lot of unknown. Again, I tend to focus on the positive, but am the first to admit that this is an historically unprecedented time, and I discussed that already. At the end of the day, it really depends on your INDIVIDUAL situation. If you have any questions, please reach out to myself or your Real Estate professional to get the best and most up to date and accurate information.
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-GZ