The State of the Housing Market N AT I O N A L U P D AT E - S P E C I A L E D I T I O N IS IT SAFE TO SELL MY HOUSE RIGHT NOW? In today’s real estate market, the buzz is all about how it’s a great time to sell your house. Buyer demand is high, and there simply aren’t enough homes available to buy to meet that growing need. This means now is the time to make a move so you can close the deal on your ideal terms.
Source: Keeping Current Matters
Even in today’s strong sellers’ market, there are homeowners who are choosing not to sell as a result of ongoing concerns surrounding the pandemic, financial uncertainty and life in general. According to Zillow, here are the top three reasons homeowners who are thinking of selling sometime in the next three years are not putting their houses on the market right now: • 34% – Life is too uncertain right now • 31% – Financial uncertainty • 25% – COVID-19 health concerns
If you identify with any of these, you’re not alone. Whether it’s the future of your employment situation or simply being uncomfortable having guests in your home for showings, life feels a lot different than it did at this time last year. The good news: We have the systems and technology in place to sell homes safely, and it’s paying off for those who are choosing to sell. We are focused on two things to make you more comfortable with the process:
Implementing Technology in the Process While abiding by state and local regulations as a top priority, we are making sales happen safely and effectively by leveraging key pieces of technology. We know exactly what today’s buyers and sellers need and how to put the necessary digital steps in place. For example, we have capitalized on the technology buyers find most helpful when deciding on a new home: • Virtual tours • Accurate and detailed listing information • Detailed neighborhood information • High-quality listing photos • Agent-led video chats • Virtual showings (if requested) We are listening to our audience and leveraging the tools that help buyers get an initial look at a home without having to step inside. This helps reduce the number of people entering your home, so only those who are seriously interested need to take the next step: in-person showings.
Facilitating Safe and Effective In-Person Showings After leveraging technology, if you have serious buyers who still want to see your house in person, we are following the guidelines set by the National Association of Realtors and utilizing safe ways to proceed. Here are a few of them, understanding again that our top priority is always to follow state and local regulations first: • Limiting in-person activity • Requiring guests to wash their hands or use an alcohol-based sanitizer • Following CDC guidelines on social distancing and wearing face coverings • Asking sellers to open all interior doors and closets to minimize touching surfaces Getting comfortable with the process and taking these steps under the current safety standards might be your best plan. This is especially important if you’re in a position where you need to sell your house sooner rather than later.
BOTTOM LINE: In this new era in our lives, things are shifting quickly, and virtual strategies may be your ideal option. Opening your doors to new approaches could be game-changing when it comes to selling your house while the market is leaning in your favor. Let’s connect and discuss how to safely and effectively navigate all that’s new when it comes to making your next move. ©2020 BHH Affiliates, LLC. An independently operated subsidiary of HomeServices of America, Inc., a Berkshire Hathaway affiliate, and a franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of Columbia Insurance Company, a Berkshire Hathaway affiliate. Equal Housing Opportunity. Information not verified or guaranteed. If your home is currently listed with a Broker, this is not intended as a solicitation
REAL ESTATE IS A DRIVING FORCE IN THE ECONOMY As the economy recovers from the 2020 health crisis, the housing market is playing a leading role in the turnaround. It’s safe to say that what we call “home” is taking on a new meaning, causing many of us to consider buying or selling sooner rather than later. Housing, therefore, has thrived in an otherwise down year. Today’s high buyer demand combined with low housing inventory means we’re seeing home prices appreciate at an above-average pace. This demand is being driven by those who want to take advantage of historically low mortgage rates. According to Freddie Mac: “The record low mortgage rate environment is providing tangible support to the economy at a critical time, as housing continues to propel growth.” These factors are driving a positive impact on the economy as a whole. According to the National Association of Realtors, the real estate industry provided $3.7 billion dollars of economic impact to the country last year. To break it down, in 2019, the average newly constructed home contributed just over $88,000 per build to local economies. Across the country, real estate clearly makes a significant impact (See map below):
Economic Impact ofa Home a Home Economic Impact of Sale Sale $133K WA $118K OR
$98K NV $171K CA
$92K MT $94K ID
$76K ND $73K SD
$67K NE $123K CO
$68K KS $55K OK
$90K (NH) $78K (VT) $73K WI
$56K $68K $62K OH $55K IL IN WV $97K $60K $62K VA MO KY $75K NC $66K TN $57K $73K SC AR $57K $65K $76K AL GA $68K MS LA
$129K (MA) $90K (RI) $81K (CT) $92K (NJ) $81K (DE) $97K (MD) $185K (DC)
UNITED STATES $88K Economic Impact of a Home Sale $50k - $75k $75k - $100k $100k +
In addition, the Bureau of Economic Analysis announced the U.S. Gross Domestic Product increased at an annual rate of 33.1% in the third quarter of 2020 after decreasing by 31.4% in the second quarter. There’s no doubt the growing economy is being fueled in part by the soaring housing market. Experts forecast this housing growth to carry into 2021, continuing to make a big impact on the economy next year as well. BOTTOM LINE: The American Dream of homeownership has continued to thrive in the midst of the 2020 economic downturn, and “home” has taken on a new meaning for many of us during this time. Best of all, the housing market is making a significant impact as the economy recovers. Source: Keeping Current Matters
WHY THE 2021 FORECAST DOESN’T CALL FOR A FORECLOSURE CRISIS As the current forbearance mortgage relief options come to an end, many are wondering if we’ll face a foreclosure crisis next year. This is understandable, especially for those who remember the housing crisis that began in 2008. The reality is: Plans have been put in place through forbearance to ensure history doesn’t repeat itself. In 2020, homeowners are able to request 180 days of mortgage relief through forbearance. Upon expiration of that timeframe, they’re also entitled to request 180 additional days, bringing the total to 360 days of deferred payment eligibility. As forbearance expires, homeowners should stay in touch with their lender, because creating a plan for the deferred payments is a critical next step to avoiding foreclosure. There are multiple options for homeowners to pursue at this point, and with the right planning and communication with the lender, foreclosure doesn’t have to be one of them. Many homeowners are concerned that they’ll have to pay the deferred payments back in a lump sum payment at the end of forbearance. Thankfully, that’s not the case. Fannie Mae explains: “You don’t have to repay the forbearance amount all at once upon completion of your forbearance plan… Here’s the important thing to remember: If you receive a forbearance plan, you will have options when it comes to repaying the missed amount. You don’t have to pay the forbearance amount at once unless you are able to do so.” When looking at the percentage of people in forbearance, we can also see that this number has been decreasing steadily throughout 2020. Fewer people than initially expected are still in forbearance, so the number of homeowners who will need to work out alternative payment options is declining (see graph). This means there are fewer and fewer homeowners at risk of foreclosure, and many who initially applied for forbearance didn’t end up needing it. Mike Fratantoni, Senior Vice President and Chief Economist at the Mortgage Bankers Association (MBA), explains:
Percentage of Overall Forbearances Decreasing 8.47%
“Nearly two-thirds of borrowers who exited forbearance remained current on their payments, repaid their forborne payments, or moved into a payment deferral plan. All of these borrowers have been able to resume – or continue – their pre-pandemic monthly payments.” For those who are still in forbearance and unable to make their payments, foreclosure isn’t the only option left. In their Homeowner Equity Insights Report, CoreLogic indicates: “In the second quarter of 2020, the average homeowner gained approximately $9,800 in equity during the past year.” Many homeowners have enough equity in their homes today to be able to sell their houses instead of foreclosing. Selling and protecting the overall financial investment may be a very solid option for many homeowners. As Ivy Zelman, Founder of Zelman & Associates, mentioned in a recent podcast: “The likelihood of us having a foreclosure crisis again is about zero percent.” BOTTOM LINE: If you’re currently in forbearance or think you should be because you’re concerned about being able to make your mortgage payments, reach out to your lender to discuss your options and next steps. Having a trusted and knowledgeable professional on your side to guide you is essential in this process and might be the driving factor that helps you stay in your home. Source: Keeping Current Matters
SELLING Demand from homebuyers has skyrocketed in 2020. Compared to this time last year home showings are up...
And the number of homes for sale is down...
High demand means sellers are poised to win big. HIGHER SALES PRICE Compared to this time last year, the median existing home price is up...
FASTER SALES In September, the average house was on the market for...
That’s an average increase of...
$40,300 THIS DEMAND WON’T LAST FOREVER.
YOUR HOUSE IS THE RIGHT MOVE, RIGHT NOW
SELLERS ARE IN THE DRIVER’S SEAT in one year
More bidding wars You pick the best offer Negotiate terms that work for you
Waiting until spring to sell your house means buyers will have more choices, so your home may not stand out from the crowd next year. Now is the time to make a move on your terms. Source: ShowingTime, Realtor.com, NAR
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