I’ve been getting this a lot –
“Ian- did you hear? The market is about to crash!”, “Is there going to be another housing crisis?” or “Nobody wants to sell or buy a house in the middle of this pandemic”
Like many things, the world of Real Estate looks very different today. COVID19’s unprecedented effect on the economy, the stock market’s extreme volatility and record high unemployment claims, all present challenges. Over 3.8 million homeowners are now in forbearance plans, representing 7.54% of all mortgages in America.
In response, the Fed has been buying an unlimited amount of Treasury and mortgage backed security loans in hopes to keep rates low, and stimulate the housing market.
Here is a look at some statistics from April last year and now in the ATL. (Data is pulled from the FMLS, attached and unattached (meaning single family and condo) within the City of Atlanta.)
Average Close Price- $445,483 up about 1% from last year, from 2018-19 the average was 13%. This doesn’t mean homes aren’t appreciating, but you could suggest seller’s are pricing their homes lower. Every house is different, as well as every situation. Like they say “There are three types of lies — lies, damn lies, and statistics.”.
# of New Listings- 1,508 down -34% from last year. Typically we see a surge of homes sold in the Spring, if seller’s do not need to move urgently, it’s fair to say they are waiting to see what the market will do. According to a study by ATTOM Data Solutions, May and June are the best months to sell a home.
Days on the Market- Median is down -2% at 20 DOM. Average is up 6%, at 66 DOM. This suggests, listings that were on the market before and have not sold (likely due to pricing), have stayed on. However new listings, priced well are selling quickly.
# of Homes for Sale- 4,216 down -.98%
So… What does this mean?
Homes are still selling, people still need to move.
The first couple weeks after our stay at home order, showings slowed way down. Gradually, sellers and buyers are navigating through this, becoming more comfortable with the new safety protocol process and have adapted with the times. We are maintaining at least 6ft radius, wearing gloves, masks, booties, spraying and wiping commonly touched areas, like doorknobs when we show property to ensure our clients’ safety. Online 3d tours, virtual showings and open houses are also great options.
For buyers, now is a great time to take advantage of low interest rates, and the softening of the market will set the stage for a 2021 rebound, it is very likely home prices will be driven up. If you don’t like where you’ve been quarantining, or are still renting, now is a great time to explore other options. Being one of the top fastest growing cities, and strongest job market in America, it’s fair to say houses aren’t getting any cheaper.
For sellers, it may not seem like the best time to sell, but keep this in mind. Before the pandemic Atlanta was in a housing shortage, now there is even less competition with your home on the market. It’s true that the unmotivated and uncommitted buyers have dropped off, but there is a long line of ready, willing and able buyers that are looking intently and ready to move. Most houses have lots of equity in them, especially those who bought in the recession. You can calculate this by getting an idea of market value from your trusted real estate advisor (i.e me), and subtract your current mortgage balance. Some sellers can sell in a seller’s market, and buy in a buyer’s market.