A deeper look into the housing

A DEEPER LOOK INTO THE US HOUSING MARKETS. WHERE YOUR MONEY SHOULD BE AT!

The 2020 housing market has been very interesting. As of now, the market remains a hot seller’s market, with annual price growth hitting record highs as inventory continues to plunge. All through the pandemic-induced housing market, homebuyers have been looking for hints of a slowdown in the real estate market that has been a beehive of activities since the economic recovery began. As of now, there is a dire need for new home supply to boost the inventory and slowdown the skyrocketing home prices.

Asking prices for homes across the country continue to soar higher in double digits, with the first week of November marking the 13th consecutive week of a doubledigit price increase this year. This upward trend of home values shows the strength of the housing market is as it was during the housing bubble. The US housing market’s strength is majorly attributed to the current all-time low mortgage rates, along with low inventory accompanied by high demand. Home Values.

According to Zillow, seasonally adjusted home values are expected to increase by 2.9% between September and the end of 2020 and incline 7% in the 12 months ending in September 2021. According to Yun, NAR’s chief economist, home prices will likely appreciate 4% in 2020 before moderating to 3% in 2021 as more new supply reaches the market.

As of November 7, weekly housing market trends revealed that median listing prices are still growing at 12.9% from last year, marking the 13th consecutive week of double-digit growth in asking prices. The value of a typical home for sale remained unchanged at $350,000.

HOUSING SUPPLY

In the week ending on November 7, new properties listed for sale dropped 12%, representing the second week of huge

declines. This setback could be attributed to the increasing COVID-19 new cases. Moreover, the total active listings declined 39% after five consecutive weeks at 38%.

Elsewhere, time on the market for a listing is 13 days faster than last year. The rapid turnover reveals the faster than usual speed of home sales despite the usually slower season.

WILL THE HOUSING MARKET CRASH OR RISE IN 2021?

According to Noradarealestate. com, the US housing market is “far from crashing in 2020 or 2021.” In fact, the housing market continues to be at the frontline of the country’s economic recovery. The current economic situation resembles a “swoosh” pattern, with the initial impact lockdown due to the pandemic, followed by a gradual recovery as the economy slowly reopens.

In case of a second wave of the COVID-19 pandemic resulting in another shutdown, the “doubledip” or a W-shaped recovery is a possible result. There would be another decline in housing activities, then followed by a period of gradual recovery.

Elsewhere, the Housing Market Recovery Index dropped to 108.0 countrywide for the week ending November 7, down 1.4 points from the previous week, according to Realtor.com’s latest recovery report. The decline comes as everyone turned their attention to the 2020 polls.

For the week ending November 14, the housing demand index dropped for the third consecutive week to 113.3, down 6.5 points from the previous week. This shows that the demand-supply imbalance continues to shorten. Although the housing demand is still very high, its rate is expected to slow down in the next few months before it surges back in Spring 2021.

In the same week, the housing supply index also fell for the second consecutive week to 95.9, down 2.7 points from the previous week. As of now, it’s not clear whether sellers will continue to list properties during winter or they will withdraw once again with the rising COVID-19 cases and the approaching festive holidays.

From all the Realtor.com indexes, it’s clear that things are headed towards a balanced real estate market. Therefore, Realtor.com doesn’t foresee any housing market crash in 2021. With mortgage rates expected to remain historically low, 2021 is still going to be a good time to buy real estate.

WHERE YOUR MONEY SHOULD BE AT

If you’re looking to buy real estate, it would be best to buy it from the best and hottest real estate markets. According to Realtor.com’s Market Hotness Index, which measures time-on-the-market and listing views per property, the east coast accounts for most of the top ten zip codes, which are as follows:

The 2020 Hottest ZIP Codes in America by Realtor.com

Rank

1

2

3

4 5

6 7 8 9 10

Zip code

80911

43068

14617

2176 4106

66614 3051 1602 22152 27604

Zip Name

Colorado Springs, CO Reynoldsburg, OH Rochester, NY

Melrose, MA South Portland, ME Topeka, KS Hudson, NH Worcester, MA Springfield, VA Raleigh, NC

Views per property

Y/Y (%)

38

69

44

14 5

99 45 45 41 81

Median days on market

13

17

18

19 21

19 22 21 7 25

Median listing price ($)

287,000

204,000

162,000

644,000 377,000

184,000 350,000 318,000 553,000

Work cited.

https://www.noradarealestate.com/blog/housing-marketpredictions/#:~:text=The%20median%20sales%20price%20of,at%20the%20 current%20sales%20rate.

THIS VETERAN HAS EXPERIENCED ENOUGH.

HE SHOULDN’T HAVE TO FIGHT HOUSING DISCRIMINATION BECAUSE OF HIS DISABILITY.

Sergio lost his leg and his hearing while serving our country overseas. Now back home, he was ready to start a new chapter in his life. But when he found the perfect apartment, the landlord refused to make a reasonable accommodation to allow his service dog in a “no pets” building. Then Sergio learned that the Fair Housing Act protects people with disabilities. He contacted HUD and fi led a complaint. Today, Sergio is feeling right at home.

If you believe you’ve experienced housing discrimination, please contact hud.gov/fairhousing 1-800-669-9777

50 YEARS OF OPENING DOORS.

YES! IT WAS A SURPRISING 2020! CAN IT GET ANY WORSE THAN THIS?

In 2020, we’ve witnessed a house-hunting bonanza gripping millions of Americans, along with the strength and flexibility of the housing market. In the same year, we’ve had the COVID-19 pandemic wreaking havoc everywhere, millions have lost jobs, the economy has grown weaker, and the American health system has undergone the greatest test of times during the current crisis. Despite all that, it wasn’t still enough to stop millions of American house hunters from flocking in real estate online platforms such as Zillow in search of data to help them plan and decide to purchase homes. Indeed, 2020 was full of surprises.

In the same period, home values have been steadily skyrocketing in recent months, as experts project that home prices are likely to continue climbing higher in some markets this fall. Surprisingly, demand for homes has been growing over the roof, even as home values continue to shoot up. As if that’s not enough surprises, data and reports from different housing market sectors continue to show that the current market is the best time to buy a home with most aspects favorably aligned, such as all-time lowinterest rates. What a great time to be alive!

As time goes on, real estate companies are preparing for what is up next and what home buying is likely to look like in this new environment, which will require them to optimize their sales funnels, focus on effective and quality leads, and boost their profitability as home sales are expected to peak in some markets. Zillow forecasts home sales are “expected to peak this fall then taper off through 2021, though still staying above pre-pandemic levels.”

“The more interesting thing [is] to sustain it. We can’t expect that kind of thing to continue,” Zillow CEO Richard Barton said of the market’s momentum on the company’s last earnings call. “So, we have to move down the funnel to find the levers to drive the business in a sustainable way, and we have these levers all the way down the funnel that we are not yet maximizing or monetizing.”

COVID-19 TIME IS DIFFERENT.

The housing market in the pandemicinduced economy in 2020 has proved to be different from the previous economic recessions. This is mainly because the current pandemic period has forced people to work from home, defining much of the housing market demand in 2020.

“There’s really no comparison to previous recessions. The housing market has done incredibly well during this pandemic-driven recession,” says Daryl Fairweather, chief economist at Redfin. “It has more to do with the pandemic itself: how everyone is stuck at home, working from home, teaching their kids from home. The home has just become so much more important.”

“The whole pandemic changed the way we think about work/life balance,” says John Campbell, a managing director at Stephens Inc. who focuses on real estate. “You factor in lower interest rates, better purchasing power, the millennial population coming in, the firsttime homebuyers—it feels like the perfect storm, all these things influencing strong buyer demand.”

OVERWHELMING GROWTH.

Demographics and all-time low mortgage rates have driven up the demand for housing. However, the lack of inventory has played a major role this time in driving home prices higher in the US. According to the National Association of Home Builders, US housing inventory levels dropped to 3.3 month’s supply as of August, representing the lowest level since 1963.

On the other hand, experts and market analysts say there is no chance that the current sales can be sustained indefinitely. “We have to be realistic and realize that there is a tipping point where prices go too high, and you start to see the demand…level off,” says Ali Wolf, chief economist at Zonda, previously known as Meyers Research. “The markets that we think could peak sooner, it doesn’t mean that they’re going to fall—it just means that they’re not going to see the unstoppable growth…a seemingly unstoppable growth, they’ve seen this year.” Wolf further projects that there could be certain markets with record even higher sales next in 2021.

DIVIDED AMERICAN DREAM.

The 2020 real estate market has generally displayed excellent resilience and speedy recovery. However, the real estate market hasn’t been equally favorable to everyone. Despite its momentum, one question remains unanswered; the question of affordability. The question of affordability represents distinctive hurdles for each real estate company, prospective homebuyer, and real estate companies looking to expand their customer base, and the economy at large.

“Affordability will actually work against the housing market in 2021,” says Wolf. “We’ve seen home prices have gone up double digits in some markets year over year, and at a certain point that home price appreciation offsets the savings from the mortgage rate.” To make it worse, the longer the pandemic persists, the wider the affordability gap grows. The only and best way out of this depends on how soon an effective and safe vaccine will be unveiled, which we all hope to be soon enough.

Work cited.

https://fortune.com/2020/10/20/real-estate-coronaviruspandemic-home-buying-zillow-redfin/.