Leading economists say the labor, housing, and stock markets will reach crucial markers that will indicate the recovery’s progress. From NAR’s virtual Real Estate Forecast Summit, Dec. 10
The housing market has been a bright spot this year, though inventory is a challenge. The problem, Berson says, isn’t just homebuilding and permitting but also getting prospective sellers to put their homes on the market. “Hopefully, people will feel good about strangers coming into their home once there’s a vaccine,” he said. – Realtor Magazine
30-year fixed-rate loans to remain below 3% during early 2021 and average about 3.2% during the next three years.
Millennials will add substantial demand for housing over the next few years.
Home prices projected to rise in most metro areas, albeit slower than in recent years.
2020 was a truly unprecedented year. With it behind us, let’s look ahead at three housing market trends that are likely during the next three years.
First, exceptionally low mortgage rates are likely to be around for an extended period. We expect 30-year fixed-rate loans to remain below 3% during early 2021 and average about 3.2% during the next three years. This would be nearly a percentage point lower than the average over the 2010-2019 decade. These low rates will provide an excellent opportunity for families with good credit to buy or refinance homes.
Second, Millennials will add substantial demand for housing over the next few years. Looking at America’s population by age, the largest numbers of Millennials are those aged 28 to 30. With 33 as the median age of recent first-time buyers, demographic forces will add an important tailwind to home-buying demand. In fact, we expect home sales relative to the housing stock, a measure of home “turnover”, in 2021 to 2023 to be above the average annual turnover rate of the prior two decades.
Third, we expect home prices to rise in most neighborhoods, albeit at a more modest pace than in recent years. Price appreciation is expected to average 2.5% per year during the next three years, compared with 4.8% per year during the prior decade. One reason for slower value growth is because we expect for-sale inventory will increase. 2020’s pandemic delayed new construction and led many prospective sellers to postpone listings. Once the coronavirus dissipates or a vaccine is widely available, we expect to see the number of new and existing homes listed for sale to rise, helping to ease price appreciation. One caveat: while we predict most communities will see gradual price growth, some metros that have been especially hard hit by the pandemic recession will likely have price declines.
No it’s not the pandemic; there we can only follow safety precautions and hope.
Rather it’s one of my clients’ timeline to Sell and Buy during 2020. How did they go from a home of 9 yrs, with three school-aged children and two full time working parents into a new build that will suit their family for the next 20+ years during an unimaginable world wide pandemic? One step at a time.
Then it was time to list their home of 9 years.
Despite being three months behind our original timeline, we referred back to the step by stepplan we had created. Without skipping a beat, my clients stuck to the plan and completed everything we had discussed to get the house ready for market. We listed on a Thursday, ratified 5 days later on that Monday and closed in 21 days on November 30, 2020.
August Housing Data Reveals a Robust Summer Market Amidst Declines in Inventory
Median Sale Price is up 9.7%
Average Sale Price up 11.2%
Months of Inventory down 60% to 1.4 months
Median days on market are down from 22 to 9
Seven of Maryland’s rural counties have seen over 20 percent increases in average prices over last year.
ANNAPOLIS, MD – September 28, 2020 Maryland’s August housing market demonstrated substantial recovery from spring’s COVID-related disruptions, according to housing statistics released by Maryland REALTORS®*. Data from June through August show both an increase in average and median home prices, and a decline in months of available inventory, echoing nationwide trends and sparking concern over housing imbalances.
“The average sales price increased year-over-year from $361,823 to $402,452 and the median price increased from $310,000 to $340,000, growth of 11.2 percent and 9.7 percent, respectively” said Maryland REALTORS® President John A. Harrison. “Months of inventory dropped 60 percent to just 1.4 months, compared to 3.5 last year, which is a historic low for the state. Moreover, the median days on market fell from 22 to 9 which aligns with stories we’ve heard of bidding wars and homes selling within hours of hitting the market.”
“The most notable, but unsurprising, feature of the current housing market is the sharp rise in activity in rural areas,” said Harrison. Seven of Maryland’s rural counties have seen over 20 percent increases in average prices over last year. With the rise in working from home, commute times are less of a factor. That and the relative affordability of rural areas make urban and some suburban communities less attractive. “The pandemic has prompted individuals and families to reimagine their housing requirements, often desiring home office space and more expansive outdoor living areas.”
Getting a house market ready is a step by stepprocess. It takes active participation from agent and owner(s). One of the most valuable insights an agent should bring to a seller is what to expect . Have you debated about selling? Take it one step at a time.
For Sale: Less than 24 hours on the market, 20+ showings and counting with an owner occupied home.
Four years ago Jacob and Amanda relocated to the DMV area for a work opportunity with every intention of going back to their home state of Michigan. Despite not knowing their timeline as to when they could go home, they knew it was better to buy versus rent. To be a a small part in their larger plan, a facilitator to the purchase of their home and now selling it, has been rewarding. Their hard work and careful planning is paying off. They are on their way home. With only three day on the market, they received an offer over list price and stand to walk away with a return on their investment.
Pending Home Sales increased by 44.3% in May, registering the highest month-over-month gain in the index since the National Association of Realtors (NAR) started tracking this metric in January 2001. So, what exactly are pending home sales, and why is this rebound so important?
According to NAR, the Pending Home Sales Index (PHS) is:
“A leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.”
In real estate, pending home sales is a key indicator in determining the strength of the housing market. As mentioned before, it measures how many existing homes went into contract in a specific month. When a buyer goes through the steps to purchase a home, the final one is the closing. On average, that happens about two months after the contract is signed, depending on how fast or slow the process takes in each state.
Why is this rebound important?
With the COVID-19 pandemic and a shutdown of the economy, we saw a steep two-month decline in the number of houses that went into contract. In May, however, that number increased dramatically (See graph below):This jump means buyers are back in the market and purchasing homes right now. Lawrence Yun, Chief Economist at NAR mentioned:
“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
But in order to continue with this trend, we need more houses for sale on the market. Yun continues to say:
“More listings are continuously appearing as the economy reopens, helping with inventory choices…Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”
As we move through the year, we’ll see an increase in the number of houses being built. This will help combat a small portion of the inventory deficit. The lack of overall inventory, however, is still a challenge, and it is creating an opportunity for homeowners who are ready to sell. As the graph below shows, during the last 12 months, the supply of homes for sale has been decreasing year-over-year and is not keeping up with the demand from homebuyers.
If you decided not to sell this spring due to the health crisis, maybe it’s time to jump back into the market while buyers are actively looking for homes. Let’s connect today to determine your best move forward.
Have you noticed that as soon as a property goes on the market, it seems that within days they’re under contract? All indicators point to a strong summer real estate market.
New pending sales up 25.5% ( Zillow June Report)
New listings taken up 19.3% month -over -month ( Zillow June Report)
Demand for housing is out pacing supply = competitive market for buyers, excellent time to be a seller ( DC Metro area months supply is 1.4)
Our area is above average when it comes to exposure to low risk jobs by market. Meaning, there are more DC metro area residents who remain working in sectors including federal, state and local government, information technology, military and utilities.
#LMRE Most Current Under Contract or Sold Properties
The current real estate environment poses a great opportunity for sellers and buyers. Timing couldn’t be better for both.
Demand for housing is high
Supply/Inventory is low, below what experts consider balanced
Interest rates are historically low
In this market sellers earn top value for their home and buyers experience greater buying power and increased affordability.
The Mid Atlantic Region to include DC, VA, MD, parts of WV, PA and DE housing Months of Supply is 2, well below the 4 to 6 months which is generally considered a balanced market.
The impact your interest rate has on your monthly mortgage payment is significant. An increase of just $20 dollars in your monthly payment can add up to $240 per year or $7,200 over the life of your loan. Maybe it’s time to lock in now while rates are still low.
How can you take advantage of this market? Don’t wait and see, connect with a RE professional and make a plan.
There’s only so much sellers can control, the key is adjusting to the things they can’t. An agent’s true value is helping a seller navigate one to minimize the other. So what happened with Vaughn Landing? It closed 7 months and 3 contracts later. A three year old townhouse with one past owner in Germantown, MD, conveniently located, minutes from MARC station, highways and shopping.
The seller had gone through all the listing steps to prepare the townhouse for market. They priced it well, given its meticulous condition, market trends at the time and comparable units.
The first contract was ratified in 12 days after initially listing it. The buyer decided he wanted to live somewhere else (that is what I was told) and he walked on the home inspection.
The second contract, despite having a gainfully employed buyer, a lender letter saying income had been verified and finances run through the mortgage lenders DU (document underwriter) system, the buyer was denied financing due to insufficient funds.
Nothing the seller had done or not done landed him in this situation. What is the best strategy in this scenario?
Accept that there are several moving parts to a real estate transaction and no one controls the entire process.
Circle around to the very first consideration of step # 3 of the sales process keeping in mind the time already on the market.
Work with the information/feedback your agent has collected to decide what adjustments, if any need to be made and when to put it back on the market.