U.S. mortgage rates fall below 3%, breaking a 50-year record, builder confidence takes another massive jump and single family housing permits and starts were higher in June as housing demand and construction remain a bright spot for the economy. We take a closer look This Week in Real Estate.
Historically low interest rates top real estate news This Week in Real Estate! For the third time in 2020 the mortgage market has recorded a new historical low for interest rates, according to the Mortgage Bankers Association. Plus, home prices are still appreciating despite the effects of COVID-19 according to CoreLogic’s newly developed Pending Price Index. Click here to read more.
If you’ve been waiting for the market to recover before listing your house, now is a good time to start getting it ready. New information from the Mortgage Banker’s Association shows mortgage applications to purchase homes is on the rise. Plus, the S&P 500 reached a two-month high and the Nasdaq finished at its highest close in three months. And, homebuilder confidence is rebounding. Click here to read more This Week in Real Estate.
As several states begin the process of reopening following the COVID-19 pandemic, a new Lending Tree study released This Week in Real Estate shows Google searches for “homes for sale” grew by 54% to end the month of April, purchase activity was higher for the fourth consecutive week, and the fiscal stimulus is impacting consumer sentiment. Click here to read more about business impacting the real estate market this week.
We’re learning more about the potential economic impacts of the coronavirus as described by leading financial institutions. Past pandemics resulted in a V-shaped recovery, which is a sharp decline followed by a steep rebound, with minimal impact on housing prices. Despite global uncertainty what we do know is mortgage rates the past two weeks experienced the largest two-week decline since December 2008, people are still buying and selling real estate, the government has passed the largest financial stimulus package ever, and jobless claims have hit record highs. Let’s take a look at a few newsworthy events influencing This Week in Real Estate.
* Looking To The Future: What The Experts Are Saying. As our lives, our businesses, and the world we live in change day-by-day, we’re all left wondering how long this will last. How long will we feel the effects of the coronavirus? How deep will the impact go? The human toll may forever change families, but the economic impact will rebound with a cycle of downturn followed by economic expansion like we’ve seen play out in the U.S. economy many times over. When looking at GDP (the measure of our country’s economic health), a survey of three leading financial institutions shows a projected sharp decline followed by a steep reboundin the second half of this year. A recent study from John Burns Consulting also notes that past pandemics have also created V-Shaped Economic Recoveries like the ones noted above, and they had minimal impact on housing prices. This certainly gives hope and optimism for what is to come as the crisis passes. From expert financial institutions to business leaders across the country, we can clearly see that the anticipation of a quick return to normal once the current crisis subsides is not too far away. In essence, this won’t last forever, and we will get back to growth-mode.
* Residential Construction is Bright Spot in Jobs Report, but More Workers Start to Stay Home. While overall construction employment fell in March, according to the Bureau of Labor Statistics, residential construction added 2,000 jobs. It remains to be seen how long that will last. In its second weekly survey of residential homebuilders, conducted from March 24 to March 31, the National Association of Home Builders found 64% of respondents cited problems with the willingness of workers and subs to report to a construction site up from 42% a week earlier. “Keeping construction going is essential to our economy in so many ways. Shelter is as critical as food and water. So we need to continue building so that there’s not a shortage of housing downstream, particularly affordable housing,” said Toby Bozzuto, CEO of Bozzuto Group.
* Mortgage Rates Drop on Fed Intervention. The average U.S. rate for a 30-year fixed mortgage fell to 3.33% this week, according to Freddie Mac, as the Federal Reserve’s bond-buying program created demand for securities backed by home loans. Together with the prior week’s drop, it was the largest two-week decline since December 2008. The Fed revived its bond-buying program on March 15 in an attempt to grease the wheels of the lending markets and prevent the type of credit crunch that devastated the mortgage industry more than a decade ago. This week’s 17 basis point drop in the average 30-year fixed rate indicates it’s working. “That drop reflects improvements in market liquidity and sentiment,” said Sam Khater, Freddie Mac’s chief economist. “Homebuyer demand has declined in response to current economic conditions,” Khater said. “The good news is that the pending economic stimulus is on the way and will provide support for both consumers and businesses.”
As fears surrounding the spread of the Coronavirus (COVID-19) impacts economies and industries worldwide, a recent survey by the National Association of Realtors (NAR) details how the Coronavirus (COVID-19), changes in mortgage rates and huge swings in the stock market are impacting the behavior of home buyers and sellers on the West Coast and nationwide.
Mortgage Rate Change
The vast majority of sellers in California and Washington have decided not to make changes to their home listing despite concerns regarding the spread of the Coronavirus (COVID-19). California is actually reporting a surge in sellers entering the market to take advantage of the historically low interest rates. Just 4% of sellers both in California and nationwide have decided to remove their home from the market and refinance. That number is slightly higher in Washington at 6%. (see graph below)
Big fluctuations in the stock market over Cornonavirus (COVID-19) concerns doesn’t appear to be having a major impact on buyers’ behavior. According to the NAR Flash Survey, realtors reported their buyers are more excited by the lower mortgage rates than they are nervous about the stock market fluctuations. (see graph below)
The majority of members reported there has been no change in buyer interest due to the coronavirus (COVID-19). However, 16 percent of members cited interest has decreased nationwide. In California, 21 percent of members cited a decrease in interest. In Washington, 19 percent of members cited a decrease in interest.
Despite coronavirus (COVID-19) concerns and big fluctuations in the stock market, the majority of sellers are still choosing to list their homes. Nationwide, only 10% of realtors cited a decrease in interest. On the West Coast, California realtors are reporting a 14% decrease while Washington realtors are reporting a 15% decrease in interest. (see graph below)
Even fewer sellers are removing their home from the market due to coronavirus (COVID-19) concerns. Most markets reported no change; however, in Washington 5% of realtors reported homes removed from the market, California reported 4%.
Sellers are, however, changing some of their requirements when it comes to how their home is viewed. About one quarter of home sellers nationwide are making changes including stopping open houses, requiring buyers hand washing or hand sanitizing, or asking buyers to remove shoes and wear footies. In California, 34 percent of sellers have adopted these or other changes. In Washington, 44 percent of sellers have adopted these or other changes. (see graph below)
Sample: The survey was delivered to 70,036 residential members including 7,000 members in the states of California and Washington. The survey had 2,518 useable responses, including 313 from California and 308 from Washington.
Dates: The survey was deployed on Monday, March 9th, and was closed on Tuesday March 10th. One reminder email was sent.
The margin of error for overall results is +/-1.95 percent. This response rate is high enough and the margin of error is low enough that the results can be considered quantitative and reflective of all members within this margin of error.
* Existing Home Sales End Year With Solid Gain. After a slight decline last month, existing home sales, released by the National Association of Realtors (NAR), surged to near two-year high in December. Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, rose 3.6% to a seasonally adjusted annual rate of 5.54 million in December, the highest level since February 2018. On a year-over-year basis, sales were 10.8% higher than a year ago. Regionally, all regions saw an increase in existing home sales in December except for the Midwest, compared to previous month. Sales in the Midwest declined 1.5% from last month. On a year-over-year basis, sales rose in all four major regions, ranging from 8.8% in the Northeast to 12.4% in the South. The December inventory decreased to 1.40 million units from 1.64 million units in November and 1.53 million units a year ago. At the current sales rate, the December unsold inventory represents a 3.0-month supply, down from a 3.7-month supply last month and a year ago. Unsold inventory has dropped for seven consecutive months. Homes stayed on the market for an average of 41 days in December, up from 38 days last month but down from 46 days a year ago. In December, 43% of homes sold were on the market for less than a month. The December median sales price of all existing homes was $274,500, up 7.8% from a year ago, representing the 94th consecutive month of year-over-year increases.
* Average U.S. Home Seller Profits Hit $65,500 in 2019, Another New High. ATTOM Data Solution released its Year-End 2019 U.S. Home Sales Report Thursday, which shows that home sellers nationwide in 2019 realized a home price gain of $65,500 on the typical sale, up from $58,100 last year and up from $50,027 two years ago. The latest profit figure, based on median purchase and resale prices, marked the highest level in the United States since 2006 – a 13-year high. That $65,500 typical home seller profit represented a 34 percent return on investment compared to the original purchase price, up from 31.4 percent last year and up from 27.4 percent in 2017, to the highest average home-seller ROI since 2006. Both raw profits and ROI have improved nationwide for eight straight years.
* Mortgage Rates Drop to Three-Month Low. The average U.S. fixed rate for a 30-year mortgage fell to 3.6% this week, a three-month low. That’s 5 basis points below last week and 85 basis points below the 4.45% of the same week last year, according to the Freddie Mac Primary Mortgage Market Survey. Sam Khater, Freddie Mac’s chief economist, said mortgage rates now are about a quarter of a percentage point above historic all-time lows. The low financing costs are providing a boost to housing demand, he said.“The very low rate environment has clearly had an impact on the housing market as both new construction and home sales have surged in response to the decline in rates, the rebound in the economy and improving financial market sentiment,” Khater said.
The second quarter of the year marked a healthy springtime market for Eugene and Southern Oregon. New listings and
active listings surged, the average for days on market narrowed in most cities and even if closed transactions inched
downward, pending transactions for the second quarter showed signs of seasonal promise.
DAYS ON MARKET
Average days on market in the second quarter of 2019 was 42 days, a 6.7% decrease from year-ago figures. In Sweet
Home, days on market surged 44% to 46 days, while year-over-year averages fell in Albany, Lebanon and Roseburg.
CLOSED TRANSACTIONS AND PENDING SALES
The number of closed units dropped 6% this quarter from 2018. Pending sales fared better this quarter, jumping 18.4%
from the same time period in 2018. Closed transactions fell year-over-year in Albany, Roseburg Sweet Home and Leb-
anon, with the latter city experiencing a 21% dip in closed sales from year-ago figures. Pending sales fared better this
quarter, jumping 18.4% from the same time period in 2018.
AVERAGE SALES PRICE
Average sales price posted a moderate first quarter, up 2.6% year-over-year in the region to $300,783. Prices for homes in
Corvallis were up 10% this quarter, landing at $408,960, the highest average price in the region.
As with most markets this quarter, Eugene and Southern Oregon saw a boost in both new and active listings. New listings soared year-over-year by 63.5% to end the quarter at 1,442.
It’s simple math… the more people who see your listing, the greater the chances for a fair and timely sale of your property.
At Berkshire Hathaway HomeServices we have one of the industry’s most comprehensive strategies for ensuring maximum exposure of a property to buyers searching in your area.
We also keep our sellers informed about current market trends by providing them with an overview of the competitive selling landscape. This helps you, the seller, make strategic pricing decisions to quickly sell your home at an agreeable price.
Here is what you get with our Seller Advantage:
Listing Presentation Report
Our Seller Advantage program gives you the information and decision-making tools throughout the home sale process. Here’s how… Our Listing Presentation Report will show you exactly how many potential buyers are searching a specific neighborhood for homes similar to yours.
Listing Activity Report
Then, once you’ve listed with me, a Berkshire Hathaway HomeServices network agent, you will get our Listing Activity Report. This details how many times your home has appeared in potential buyers’ search results and how many times your listing has been viewed.
Market Activity Report
Last, but not least, we offer a market activity report. Perhaps your not ready to sell, but would like a sense of buyer interest in your neighborhood and in homes like yours. The Market Activity Report will show you just how many people are searching in your neighborhood for a home like yours. You’ll gain specific market updates including new listings, price changes and status changes.
Such comprehensive information, combined with the global reach that only Berkshire Hathaway HomeServices can offer, will give you unmatched advantages when you list and sell your home.
Contact me to set up your free home evaluation now. Let me help you get the most money for your investment!