6 Weeks Into Covid 19

Six weeks into our stay at home order, it’s safe to say that nothing looks the same as it did a few weeks ago.

As a realtor I'm used to the question "how's the market?" - who doesn't like talking about Real Estate? I will admit, my answer today is different than it was 6 weeks ago. Asked at the beginning of the year I would say "it's flourishing", now my answer is "day by day, hour by hour. Some of my buyers and sellers are telling me to hold for now and I am supporting them in their decision while I continue to communicate and keep them aware of what's happening in the market. And some of my clients need to sell or buy right now. And we are doing that today with our protocols in place for safety, smart marketing, virtual showings and more."

I'm sure you know what's next. Given all the uncertainty, the negative headlines (bad news sell so much better than good news), the confusion and the anxiety (we remember 2008 all too well) it's so understandable to ask

"Will the market crash like in 2008?"

Since I don't have a crystal ball that would tell me what the next months will bring us, my only option is to dig into the news and market stats, attend webinars with experts, attend zoom chats with fellow agents and gather every information I can to provide a profound answer.

And my answer is "No, this is not like 2008. May I tell you why?"

Going into the current pandemic the overall economy was strong, interest rates were low and the Real Estate industry was healthy. None of this was the case in 2008.

2008's recession was majorly CAUSED by the crashing Real Estate market and the mortgage industry. That's not the case today.

Home prices have been rising lately, but not at the rate they were climbing back when we had runaway appreciation.

Today we are nowhere near the mortgage availability seen before the housing crash when it was very easy to get approved for a mortgage; the lending standards tightened and remained that way up to today.

In 2008 we had an oversupply of homes for sale. Today, and not only since this pandemic started but many months prior, we don't have enough homes on the market for the number of people who want to buy them.

In 2008 people were harvesting equity from their homes and using it to finance their lifestyle. Today 54% of all homeowners across the country have at least 50% equity.

Interest rates have been going down constantly, now still on an unprecedented low level.

Not to forget the moratorium implemented by the government on foreclosures and directing mortgage servicers to offer forbearance or reduced payments on any mortgage backed by Freddie Mac, Fannie Mae or FHA (90% of all loans).

 

What will our local market in Broward County look like in a couple of months? Again, I don't have a crystal ball but given the numbers - please see my market update, updates will appear monthly - and local experts' statements, this is what we most likely will see:

Buyers that were holding off the last couple of weeks will flock back into the market.

With already low inventory this will lead to an even stronger sellers' market.

Prospective sellers that used the stay at home time to update their homes, made necessary renovation or added curb appeal will have an even stronger position.

 

Some additional thoughts:

The pandemic has put many things into perspective including the value of living in a home with a yard. After being cooped up in an apartment for more than a month and counting, it seems logical that at least some apartment / condo renters / owners might decide to move into single-family homes.

Home owners that continue to work from home might realize their current home doesn't fit their
new needs, looking for a bigger home.

A new survey by the National Association of Realtors shows that 81% of home buyers are animal lovers, and will choose one home over another because of pet-friendly features. Those features could include the kind of flooring in the house or fencing around the yard. They also want to be near pet-friendly amenities like dog parks and places to walk their dogs. These sentiments also apply to tenants looking for a place to rent. And, it’s important to note, there could be many more people with pets as we emerge from this pandemic. Pet shelters have reported a surge in pet adoptions as people deal with the isolation of stay-at-home policies, and adopt a pet to keep them company.

Investors are preparing to take advantage of new opportunities in the housing market that have emerged as a result of the COVID-19 pandemic. Investors still see potential growth areas and opportunities for home flipping and rentals.

If I can help YOU in any way please don’t hesitate to let me know.  Contracts are still going to closing, buyers are still buying (with low interest rates and now, less competition) and sellers are still putting homes on the market.

NAR

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