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REAL ESTATE

Insider

The State of the Housing Market

N O R T H E A S T F L O R I D A U P D AT E - S P E C I A L E D I T I O N

WILL HOME VALUES APPRECIATE OR DEPRECIATE IN 2020? With the housing market impacted by the health and financial crisis, some potential purchasers are questioning whether home values will decline. The price of any item is determined by supply as well as the market’s demand. Each month the National Association of REALTORS® (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for the REALTORS® Confidence Index. The latest edition sheds some light on the relationship between seller traffic (supply) and buyer traffic (demand) during this pandemic.

Buyer Demand

The map below was created after asking the question: “How would you rate buyer traffic in your area?”

Seller Supply

The index also asks: “How would you rate seller traffic in your area?”

The map indicates 46 states and Washington, D.C. reported ‘weak’ seller traffic, three states reported ‘stable’ seller traffic, and one state reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is Note: In Northeast Florida, demand was very strong going needed to satisfy buyers looking for homes. With demand still into the 2nd Quarter, so stable would indicate continued stronger than supply, home values should not decline. Note: In Northeast Florida, there is tremendous opportunity for Sellers strength. right now. Pent-up demand coupled with a low inventory Source: Keeping Current Matters creates a very strong selling environment. The darker the blue, the stronger the demand for homes is in that area. The survey shows that in 34 of the 50 U.S. states, buyer demand is now ‘strong’ and 16 of the 50 states have a ‘stable’ demand.

What are the experts saying? Here are the thoughts of three industry experts: Ivy Zelman: “We note that inventory as a percent of households sits at the lowest level ever, something we believe will limit the overall degree of home price pressure through the year.” Mark Fleming, Chief Economist, First American: “Housing supply remains at historically low levels, so house price growth is likely to slow, but it’s not likely to go negative.”

Freddie Mac: “Two forces prevent a collapse in house prices. First, as we indicated in our earlier research report, U.S. housing markets face a large supply deficit. Second, population growth and pent up household formations provide a tailwind to housing demand.” Bottom Line: Based on all market indicators, we believe that housing prices will remain stable throughout 2020 and anticipate 3 percent appreciation. If you’re thinking about listing your home, let’s discuss how you can capitalize now on the demand in our local market.

©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


NORTHEAST FLORIDA UPDATE - SPECIAL REPORT I will always be here to help guide you with your buying and selling decisions based on sound facts and data, but that is only part of the equation. Every one of my clients has a different reason for wishing to buy or sell and it is important for us to discuss your personal situation, virtually or in person. In order to paint the picture, we look for leading indicators such as the consumer confidence index, employment numbers, months of supply and list price to sales price ratio, among others. My goal is to help you understand what the big picture looks like and separate the facts from inaccurate information. It is a funnel process: I start broad and look at national numbers, regional numbers and then by community. Most importantly, I consider every individual’s situation and specific property analysis.

THE BIG PICTURE: • National Annual Home Price Appreciation has been moderate to strong over the past six years, yet far more tempered than leading up to the Great Recession of 2008. This means we are not overinflated in terms of pricing.

• There is a completely different picture in terms of Home Equity. Larger equity levels mean fewer foreclosures negatively impacting prices.

Annual Home Price Appreciation 12.5%

53.8%

11.4%

of all homes in America have at least 50% equity

8.5% 8.7%

8.6% 6.5%

4.4%

5.2% 5.5%

6.4% 4.8% 4.7%

The 6 years leading up to the housing crash

The last 6 years

2000 2001 2002 2003 2004 2005

2014 2015 2016 2017 2018 2019

Americans are sitting on tremendeous equity

37%

of all homes are owned “free and clear”

26.7%

of the mortgaged homes have at least 50% equity

Bloomberg

ATTOM Data

• According to the University of Michigan, “April’s final (Consumer Confidence) Sentiment Index reading remained largely unchanged from the mid-month figure (+0.8 points), and households with below median incomes expressed the same level of confidence as those with above median incomes (71.9 points). The notable divergence between the two main components of the Sentiment Index remained large. The Current Conditions Index fell by 29.4 points in the past month and by 40.5 points in the past two months, whereas the Expectations Index has posted smaller declines of 9.6 points in the past month and 22.0 points from February.” If reopening goes well, this could indicate a potentially speedier recovery than initially expected as hope for the future is elevated from today’s perception.

COVID-19’s impact is different across markets as a result of: (1) Different geographic exposures among industries and companies

(2) Varying levels and timelines of physical distancing efforts

(3) Disparate impacts to employment and economic activity

(4) Shifting levels and time frames of COVID-19 infections

Joblessness in the hardest hit states is three to four times higher than less-impacted states. Florida has shown the most resilience and this is another positive for our local economy. • The big challenge locally has to do with supply (new listings). Listing inventory has dropped substantially. Today’s sellers are in a very strong competitive position. Look at the months’ supply heading into April. The lower the number, the stronger the seller’s market. Six months is generally regarded as “normal.” Northeast Florida is still in an imbalance and demand is far outpacing supply.


30.0%

5.4%

7.8%

8.5%

8.8%

9.9%

9.3%

9.8%

10.0%

9.8%

10.4%

11.9%

12.1%

12.8%

13.2%

13.3%

13.8%

14.5%

16.6%

16.9%

14.9%

15.0%

17.0%

18.3%

18.6%

20.0%

19.7%

20.9%

24.2%

25.0%

Increase in Insured Unemployment as Percent of Labor Force: Current Level Less Six Week Pre-COVID Average

5.0%

0.0%

CA MI NV NY PA RI WA WA LA KY MA NJ MN NC SC OH TN IL WI VA IN TX MO MD FL

Source: Department of Labor, Zeiman & Associates analysis

The point: The real estate market is moving forward, with buyers moving at a faster pace than sellers. I am available and capable of providing consultations virtually. I have the processes in place to help you accomplish your objectives in this or any market.

Months Supply of Inventory

6.0

Single-Family Homes, All Price Tiers, All Sales Types

5.5

Saint Johns County

5.0

Duval County

4.5

Clay County

4.0 3.5

The lower the number, the hotter

3.0

the market.

2.5 2.0

Mar ‘18

Mar ‘19

Mar ‘20


5

THINGS TO DO

IF YOU’RE SELLING YOUR HOME DURING THE PANDEMIC

1

Clean and disinfect your home thoroughly. Finish up any do it yourself jobs and work on your home’s curb appeal.

2

All open houses should be virtual during this time. Your Berkshire Hathaway HomeServices REALTOR® is fully equiped to host virtual open houses through various streaming platforms.

3

Use teleconferencing and e-signing programs to negotiate contracts.

4

Be flexible. Know that your closing date could shift, so be sure to account for potential delays.

5

People have more time now to househunt, and everyone needs a place to call home. Contact us for a consultation and we’ll help you get ready.

YES, YOU CAN BUY A HOUSE NOW! Here’s what you need to know about househunting during the time of coronavirus...

BE PATIENT. The home-buying process is taking longer than usual.

REAL ESTATE has been deemed an essential service in Florida, and our REALTORS® are ready to assist you – safely.

GET PRE-APPROVED for a mortgage ASAP. Interest rates are at near all-time lows (but they won’t be forever), and some lenders are extending lock-in rates for up to 90 days.

(NOTE) Moving companies are considered an essential business!

SHOP from the comfort and safety of your own home. Ask for video and virtual tours or schedule a personal video walkthrough with your REALTOR®.

Source: USA Today, Business Insider, Realtor.com

Northeast Florida Update Special Edition (Single Agent)  

Northeast Florida Update Special Edition (Single Agent)  

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