Real Estate

The Latest Unemployment Rate Fell to 8.4% | Simplifying The Market

Last Friday, the Bureau for Labor Statistics released their Employment Report for August 2020. The big surprise was that the unemployment rate fell to 8.4%, a full percent lower than what many analysts had forecasted earlier in the week. Though it is tough to look at this as great news when millions of Americans are still without work, the number of unemployed is currently much lower than most experts had projected it would be just a few months ago.

Not Like the Great Depression or Even the Great Recession

Jason Furman, Professor of Practice at Harvard explained:

“An unemployment rate of 8.4% is much lower than most anyone would have thought it a few months ago. It is still a bad recession but not a historically unprecedented event or one we need to go back to the Great Depression for comparison.”

During the Great Depression, the unemployment rate was over 20% for four consecutive years (1932 – 1935). This April, the rate jumped to 14.7%, but has fallen each month since.

During and after the Great Recession (2007-2009), the unemployment rate was at 9% or greater for thirty consecutive months (April 2009 – October 2011). Most economists believe the current rate will continue to fall monthly as the economy regains its strength.

What Happens Going Forward?

The outcome will be determined by how quickly we can contain the virus. In their last Economic Forecasting Survey, the Wall Street Journal reported the economists surveyed believe the annual unemployment rates will be 6.6% in 2021 and 5.5% in 2022. Though that will still be greater than the 3.5% rate that we saw earlier this year, it is lower than the annual rate reported in 2011 (8.5%), 2012 (7.9%), and 2013 (6.7%).

Bottom Line

There are still millions of Americans struggling through this economic downturn. There is, however, light at the end of the tunnel. The unemployment situation did not get as bad as many had predicted, and the recovery is taking place faster than most thought would happen.

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Real Estate

Homebuyer Traffic Is on the Rise | Simplifying The Market

One of the biggest surprises of 2020 is the resilience of the residential real estate market. Lawrence Yun, Chief Economist of the National Association of Realtors (NAR), is now forecasting that more homes will sell this year than last year. He’s also predicting home sales to increase by 8-12% next year. There’s strong evidence that he will be right.

ShowingTime, a leading showing software and market stat service provider for the residential real estate industry, just reported on their latest the ShowingTime Showing Index:

“Home buyer traffic jumped again in July, recording a 60.7 percent year-over-year increase in nationwide showing activity.”

That means there are 60% more buyers setting appointments to see homes than there were at this same time last year. The number of potential purchasers was also up dramatically in every region of the country:

  • The Northeast was up 76.6%
  • The West was up 56.7%
  • The Midwest was up 52.1%
  • The South was up 46.7%

The Housing Market Is Showing a ‘V’ Type Recovery

ShowingTime also indicates the real estate market has already come back from the downturn earlier this year that was caused by shelter-in-place orders. Here are the year-over-year numbers for each region on a monthly basis (See graph below):Homebuyer Traffic Is on the Rise | Simplifying The MarketWe’re way ahead of where we were at this time last year. This data validates the thoughts of Frank Martell, President and CEO of CoreLogic, who recently noted:

“On an aggregated level, the housing economy remains rock solid despite the shock and awe of the pandemic.”

Bottom Line

If you’re thinking about selling your house, this may be a great time to get the best price and the most favorable terms.

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Real Estate

Virtual School Is Changing Homebuyer Needs [INFOGRAPHIC] | Simplifying The Market

Virtual School Is Changing Homebuyer Needs [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • With remote learning sweeping the nation this academic year, organized spaces with enough room for kids to learn effectively are high on buyer wish lists.
  • If you’re trying to make room for your family’s growing needs, multi-purpose rooms and dedicated workspaces may be features to consider in your next home.
  • Let’s connect today so you can find a home where your kids feel confident and comfortable too.

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Real Estate

Is Now a Good Time to Move? | Simplifying The Market

How long have you lived in your current home? If it’s been a while, you may be thinking about moving. According to the latest Profile of Home Buyers and Sellers by the National Association of Realtors (NAR), in 2019, homeowners were living in their homes for an average of 10 years. That’s a long time to be in one place, considering the average length of time homeowners used to stay put hovered closer to 6 years.

With today’s changing homebuyer needs, especially given how the current health crisis has altered our daily lifestyles, many homeowners are reconsidering where they’re at and thinking about moving to a home with more space for their families. Here’s why it might be a great time to make that happen.

The real estate market has changed in many ways over the past 10 years, and current homeowners are earning much more equity today than they used to have. According to CoreLogic, in the first quarter of 2020 alone, the average homeowner gained approximately $9,600 in equity. If you’re considering selling your house right now, you may have accumulated more equity to put toward a move than you realize.

Dialing back 10 years, many homeowners also locked in a fairly low mortgage rate. In 2010, the average rate was only 4.09%. This motivated homeowners to stay in their houses longer than usual to keep their rate low, rather than moving. Just last Thursday, however, average mortgage rates hit a new historic low at 2.86%. Sam Khater, Chief Economist at Freddie Mac explains:

Mortgage rates have hit another record low due to a late summer slowdown in the economic recovery…These low rates have ignited robust purchase demand activity, which is up twenty-five percent from a year ago and has been growing at double digit rates for four consecutive months.”

Ten years ago, we couldn’t have imagined a mortgage rate under 3%. Looking at the math today, making a move into a new home and locking in a significantly lower rate than you have now could save you greatly on a monthly basis, and over the life of your loan (See chart below):Is Now a Good Time to Move? | Simplifying The MarketAs the example shows, you can save a substantial amount every month if you qualify for today’s low mortgage rate, and the savings can really add up over the life of a 30-year fixed-rate loan.

Bottom Line

As a homeowner, you have a huge opportunity to move up right now. Whether you want to save more each month or get more home for your money based on your family’s changing needs, it’s a great time to connect to discuss the market in our area. Buyers are actively looking for more homes to buy, and you can win big by making a move if the time is right for you.

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Real Estate

The Surging Real Estate Market Continues to Climb | Simplifying The Market

Earlier this year, realtor.com announced the release of the Housing Recovery Index, a weekly guide showing how the pandemic has impacted the residential real estate market. The index leverages a weighted average of four key components of the housing industry by tracking each of the following:

  1. Housing Demand – Growth in online search activity
  2. Home Price – Growth in asking prices
  3. Housing Supply – Growth of new listings
  4. Pace of Sales – Difference in time-on-market

The index compares the current status “to the January 2020 market trend, as a baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period. The higher a market’s index value, the higher its recovery and vice versa.”

The graph below charts the index by showing how the real estate market started out strong in early 2020, and then dropped dramatically at the beginning of March when the pandemic paused the economy. It also shows the strength of the recovery since the beginning of May.The Surging Real Estate Market Continues to Climb | Simplifying The MarketToday, the index stands at its highest point all year, including the time prior to the economic shutdown.

The Momentum Is Still Building

Though there is some evidence that the overall economic recovery may be slowing, the housing market is still gaining momentum. Zillow tracks the number of homes that are put into contract on a weekly basis. Their latest report confirms that buyer demand is continuing to dramatically outpace this same time last year, and the percent increase over last year is growing.The Surging Real Estate Market Continues to Climb | Simplifying The MarketClearly, the housing market is not only outperforming the grim forecasts from earlier this year, but it is also eclipsing the actual success of last year.

Frank Martell, President and CEO of CoreLogic, explains it best:

“On an aggregated level, the housing economy remains rock solid despite the shock and awe of the pandemic.”

Bottom Line

Whether you’re considering buying or selling, staying on top of the real estate market over the coming months will be essential to your success.

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Real Estate

How Low Inventory May Impact the Housing Market This Fall | Simplifying The Market

Real estate continues to be called the ‘bright spot’ in the current economy, but there’s one thing that may hold the housing market back from achieving its full potential this year: the lack of homes for sale.

Buyers are actively searching for and purchasing homes, looking to capitalize on today’s historically low interest rates, but there just aren’t enough houses for sale to meet that growing need. Sam Khater, Chief Economist at Freddie Mac, explains:

Mortgage rates have hit another record low due to a late summer slowdown in the economic recovery…These low rates have ignited robust purchase demand activity…However, heading into the fall it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity.”

According to the National Association of Realtors (NAR), right now, unsold inventory sits at a 3.1-month supply at the current sales pace. To have a balanced market where there are enough homes for sale to meet buyer demand, the market needs inventory for 6 months. Today, we’re nowhere near where that number needs to be. If the trend continues, it will get even harder to find homes to purchase this fall, and that may slow down potential buyers. Danielle Hale, Chief Economist at realtor.com, notes:

“The overall lack of sustained new listings growth could put a dent in fall home sales despite high interest from home shoppers, because new listings are key to home sales.”

The realtor.com Weekly Recovery Report keeps an eye on the number of listings coming into the market (houses available for sale) and the total number of listings staying in the market compared to the previous year (See graph below):How Low Inventory May Impact the Housing Market This Fall | Simplifying The MarketBuyers are clearly scooping up homes faster than they’re being put up for sale. The number of total listings (the orange line) continues to decline even as new listings (the blue line) are coming to the market. Why? Javier Vivas, Director of Economic Research at realtor.com, notes:

“The post-pandemic period has brought a record number of homebuyers back into the market, but it’s also failed to bring a consistent number of sellers back. Homes are selling faster, and sales are still on an upward trend, but rapidly disappearing inventory also means more home shoppers are being priced out. If we don’t see material improvement to supply in the next few weeks, we could see the number of transactions begin to dwindle again even as the lineup of buyers continues to grow.”

Does this mean it’s a good time to sell?

Yes. If you’re thinking about selling your house, this fall is a great time to make it happen. There are plenty of buyers looking for homes to purchase because they want to take advantage of low interest rates. Realtors are also reporting an average of 3 offers per house and an increase in bidding wars, meaning the demand is there and the opportunity to sell for the most favorable terms is in your favor as a seller.

Bottom Line

If you’re considering selling your house, this is the perfect time to connect so we can talk about how you can benefit from the market trends in our local area.

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Homes Across The Country Are Selling Fast

Homes Across the Country Are Selling Fast [INFOGRAPHIC] | Simplifying The Market

Homes Across the Country Are Selling Fast [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • Buyers are actively searching for and purchasing homes at a record-breaking pace. According to the latest report from the National Association of Realtors (NAR), in July, 68% of homes were on the market for less than a month.
  • With homes moving from listing day to pending sale in an average of just 22 days, it’s a great time to sell a house.
  • Let’s connect today so you can make your move while buyers are scooping homes up faster than they’re coming to market.

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