Mid Year Market Update
2020 has most certainly been one for the books!
Covid-19, Protests, Riots, Kobe Bryant, No Olympics, Distance Learning,
Social Distancing, Murder Hornets, Locusts, SpaceX, Australia Burning,
Royals Leaving Royalty, Zoom, and let's not forget, Tiger King.
We've made it past the half-way marker!
Although this year has brought many challenges, these defining moments
have been shaping our economy in a very surprising way.
With many businesses forced to shut down, unemployment rates
sky-rocketed in the initial phase of sheltering at home.
Many were worried they wouldn't be able to pay their mortgages
and would need to rely on a forbearance program.
We have made a surprising rebound, and the Real Estate industry
is leading the pack! For the first time since March of this year,
Home Sales have actually surpassed pre-Covid numbers week over week since May. Here's a look at the past weeks numbers for San Luis Obispo County, informational stats from CAR's June Housing Report
& helpful comparisons from last year versus this year.
As you can see, home prices have been rising during the 'lockdown' and could rise even further due to heavy buyer competition and significant shortage of supply. The Real Estate forecast for the rest of the year varies in projections, but supply and demand will always determine prices. We've seen a clear spike in Home Prices, powered by historically low interest rates, dipping below 3% this past month. The number of homes for sale across the U.S. is down 31% and California's inventory is down a whopping 43% year over year. Prices for existing homes jumped 7.4% in April 2020 compared to a year earlier.
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Mortgage rates have fallen to a new all-time low and homebuyers are rushing out to take advantage, especially first-time home buyers and Millennials. Mortgages have averaged around 8% over the last 50 years! With rates below 3% and hovering just above, many can afford to buy in a higher price point. Existing home owners are taking advantage of refinancing or realizing that they need a bigger or smaller house after spending more time at home.
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You can see the 'V' shaped recovery since March 2020 through June 2020.
Some forecasters speculated we would experience a 'W' shaped recovery.
We're experiencing a new recession phenomenon, however.
In our current climate, unlike what we saw during the 2008 housing crisis,
home prices have appreciated in value, interest rates are low, and the demand for housing is higher than ever. Currently, Real Estate is set up to help us out of an economic downturn, not into it.
DAYS ON MARKET
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Bottom Line: Now is an incredible time to sell & buy a home!
WIN - WIN
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KEY: SFH = Single Family Home FRM = Fixed Rate Mortgage
SFR = Single Family Residential
All data comes from the CRMLS, InfoSparks, Michael Lewis Marketing Suite, Altos R.E., Keeping Current Matters, NAR (National Association of Realtors) & CAR (California Association of Realtors) Current as of 7/28/2020.
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