You're a Half-Full Type of Person!
Congrats! You’re looking at the bright side of things. You’re seeing optimism, and believe me, there is some optimism to be seen. Let’s talk about the Real Estate Road to Recovery and where I see benefits, for both Buyers, and Sellers.
You’re a Seller
Congrats. We have 40% LESS homes on the market right now than we did during the height of the Summer last year. Pricing has gone up roughly 4% in the last year, and that’s even including the price decline we did see in April. With less inventory, your home has the potential to stand out amongst the competition, especially if it’s priced well and in good condition. With Interest Rates at close to all-time lows, the buyers that are out there have extra buying power.
If you are currently already on the market, I expect to see showing traffic INCREASE (if showings are easily available). We are already seeing our Buyers that backed off the market in March start coming back to pick up showings. Our lead generation yielded 60% MORE leads in April than in March, and our conversation % has increased dramatically. Quite simply, we do expect a strong Spring / Summer selling season, with the caveat that of course, things are going to remain a bit different than before; but that can be said about almost everything.
If you’re not on the market yet, but want to beat your neighbors to market, now is the time to act!
You’re a Buyer
Moving sooner than later may be a benefit, as some Buyers are still waiting things out. Well priced homes are still selling fast, but the lack of active buyers gives you the advantage. In January and February, we were seeing multiple offers on all of our listings within days of listing the home. They were selling dramatically over asking price, and things were very aggressive. Now, sellers that have been on the market for a bit are more willing to negotiate. Does this mean you’re getting a home for 10% under value? No, it doesn’t. But you may not be competing with 15 other buyers, which alone increases the chances your well-written offer is received well by the Seller.
Mortgage rates are also insanely cheap right now, offering you as a Buyer more buying power than almost ever before. Locking in good rates is the key to keeping your costs down. While rates do jump around like the stock market, the trend for them has been in a range of being a GREAT time to buy.
Low Rates + Less Competition from Other Buyers = A GREAT TiME TO BUY!
Selling and Buying?
One of the most difficult things is to try and sell a home and simultaneously buy, especially in a VERY strong sellers market. Many people will not be willing to agree to a contingency sale, and most likely, this is what you would be doing if you’re selling and buying. However, this market is different as we know. If your home is list-ready; looks good and is priced well, you will probably see some Sellers that are more willing NOW to accept your contingency sale. These are still tricky, so working with a professional who understands the hurdles involved will make this process as smooth as possible. Let us know how we can help!
Market Activity
We are seeing an increase in market activity. In fact, even with the Holiday yesterday, we have seen over 1000 properties go UNDER CONTRACT in May so far in the first 10 days. From April 1-10, we saw about 800 properties go under contract in the first 10 days! That’s a 25% increase, month over month. This is a great sign of continued growth. Here’s what it looks like, graphically.
The Orange Line is this year and the Blue line is last year. You’ll see a pretty clear indication of when the shutdown started. It makes sense that showings really dropped off a proverbial cliff. But if you look at the chart, it appears we ‘bottomed’ right about April 13th, and have seen an uptick since then. The small drop-off we had the last few days can be attributed to the Mother’s Day Holiday!
If you want to follow this data, the above chart is updated daily and can be viewed here: ShowingTime Stats
Closing
We all went through a rough storm, and look to be emerging strongly. Things will take some time to adjust, but we still have strength in our housing market. There are reasons for concern (Relapse, etc) but things are appearing to be moving in the right direction, regardless of whether you’re a Seller or a Buyer, or both.
What do you think the market is going to do?
-GZ
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