With stay-at-home orders starting to gradually lift throughout parts of the country, data indicates homebuyers are jumping back into the market. After many families put their plans on hold due to the COVID-19 pandemic, what we once called the busy spring real estate season is shifting into the summer. In 2020, summer is the new spring for real estate.
- Google reports searches for “homes for sale” are up an average of 54% from 2020 lows in 50 metro areas.
- Freddie Mac’s chief economist said, “Today’s purchase demand is only down 10% from a year ago.”
- Zillow reports new listings nationally grew 5.9%, up for the third week in a row.
- Applications for mortgages to purchase homes went up 6% for the week and only 1.5% below a year ago.
These are all positive trends.
- Last 12 months in Orange County-Seven Gable Real Estate leads the top 10 companies in the fewest “Days On Market” of any company.
- Offices YTD (closings-not pended): 850+ sides, UP 3.3% over 2019
- Month Over Month: comparing April 1-25 to May -25-All of Orange County-New listings UP 34%, Pended sales UP 60.4%
- Month Over Month-same period, over 1 million in OC-New listings UP 58.4%, Pended sales UP 94.6%
- Month Over Month-same period, over 2 million in OC-New listings UP 71.7%, Pended sales UP 48.2%
What’s the Opportunity for Buyers? Another reason buyers are coming back to the market, even with forced unemployment and stay-at-home orders, is historically low mortgage rates. Sam Khater, Chief Economist at Freddie Mac indicates: “For the fourth consecutive week, the 30-year fixed-rate mortgage has been below 3.30 percent, giving potential buyers a good reason to continue shopping even amid the pandemic…As states reopen, we’re seeing purchase demand improve remarkably fast, now essentially flat relative to a year ago.” With mortgage rates at such low levels and states gradually beginning to reopen, there’s more incentive than ever to buy a home this summer.
What’s the Opportunity for Sellers? Finding a home to buy, however, is still a challenge, as this spring sellers removed many listings from the market. Though more people are now putting their houses up for sale this month as compared to last month, current inventory is still well below last year’s level. According to last week’s Weekly Economic and Housing Market Update from realtor.com: “Weekly Housing Inventory showed continued tightening. New Listings declined 28% compared with a year ago, as sellers grappled with uncertainty and hesitated bringing homes to market. Total Listings dropped 20% YoY, a faster rate than in prior weeks, leaving very few homes available for sale. As Time on Market was 15 days slower YoY, asking prices moved up 1.5% YoY.”
If you’re thinking of selling your house this summer, now may be your best opportunity. With so few homes on the market for buyers to purchase, this season may be the time for your house to stand out from the crowd. Stovall Team will help you list safely and effectively, keeping your family’s needs top of mind. Buyers are looking, and your house may be at the top of their list. If you’re thinking of selling, many buyers may be eager to find a home just like yours. Reach out to Stovall Team today to make sure you can get your house in on the action this summer. Call me today at 714.343.9294.
Is it Time to Sell Your Vacation Home?
The travel industry is one of the major sectors that’s been hit extremely hard by the COVID-19 pandemic. Today, it’s hard to know how long it will take for summer travelers to be back in action and for the industry to fully recover. Homeowners who rent their secondary properties on their own or through programs like Airbnb, which has over 660,000 listings in the U.S. alone, have been impacted in this challenging time. Some of these homeowners are considering selling their vacation homes, and understandably so.
A recent CNN article indicated:
If you’re one of the property owners in this position, you too may be feeling the pain of decreased travel, especially as we prepare for the typical busy summer vacation season. A recent survey notes that 48% of Americans have already canceled summer travel plans due to the current health crisis. In addition, 36% indicated they don’t have vacation plans, and only 16% said they did not cancel their summer travel.
The same survey also asked, “How long will you wait before traveling again?” Not surprisingly, only 29% of respondents are planning to travel within the next 6 months. That means 71% are putting their plans on hold for at least 6 months, or are still unsure about future travel. That can continue to add to the significant income loss that many property renters felt this spring.
If you’re considering selling your rental property, know that there are two key factors indicating that selling your vacation home now may be your best move as a homeowner.
1. Inventory Shortage
The inventory of overall homes for sale is well below the demand from potential buyers, so many eyes may be searching for a home like yours. According to the National Association of Realtors (NAR), total housing inventory, meaning homes available to purchase, is down 19.7% from one year ago (see graph below):
Inventory across the country continues to be a challenge, with only a 4.1-month supply of listings available at the current sales pace. For a balanced market, where there are enough homes available for interested buyers to purchase, that number would need to bump up to a 6-month supply. This means we don’t have enough inventory for the number of buyers looking for homes, so selling in this scenario is ideal. Buyers are looking now, and some vacation homes make a great primary residence or second home for those eager to escape from more populated urban areas.
2. Home Prices
The lack of inventory is also keeping homes from depreciating in value. Today, prices are holding strong and experts forecast home price appreciation to continue throughout this year. Selling your home while prices are holding steady is a sound business move. You’ll likely have equity you’ve earned working for you as well. If your home has been vacant for the past few months, the forced savings you have built in your equity may help balance out possible rental income loss due to the slowdown in the travel industry.
We don’t know exactly when heightened summer travel will return or what it will look like when it does. If you’re considering selling your vacation home, contact a local real estate professional to determine your options in the current market. The Stovall Team will simply & effectively explain our complex housing market.