Silver Lining in Housing Market
I think we can all agree that a bit of good news is welcome. My gig is working in the residential real estate market, particularly along the coastal towns of South Orange County. I like data and spreadsheets…things that bore most people to tears. But hey, I can be fun, sometimes. Maybe a little, right? Right?
Okay, never mind that. Here’s what I have for you: I compiled all sales of single-family homes this year from March 1, 2020 in Laguna Beach, Dana Point and San Clemente…right about when the pandemic took hold, up to May 27. Next, I ran the same search for the same dates in 2019 and compared all the results. One thing became obvious; a LOT fewer homes were sold this year than last. In fact, unit sales were down 30%, while total revenue was down 40%. As much as our industry has taken a hit, my heart goes out to owners of and workers in restaurants, and bars, and gyms, and hotels, and hair salons, and, well you know…
So this is the good news part:
IF YOU’RE A SELLER First, prices are holding up pretty well, but are somewhat lower. When you look at the median dollar-per-foot statistic, prices are 5% lower than the same period last year. The median price of homes sold is down by 7%, but the size of the homes was also a little smaller. The other good news is the time it takes to sell a home was almost cut in half – down by a whopping 47%. That is due to the fact that so many people took their homes off the market during the outbreak. That, and the fact that we weren’t allowed to leave our homes. The median time a home stayed on market was just 20 days, down from 38 in 2019. That means less than three weeks to sell a home. Not bad. Therefore, if you decide to sell a property, there appear to be a lot of willing and able buyers in the market.
IF YOU’RE A BUYER Let’s be real; if someone has their house on the market at this time, they’re probably fairly motivated. With prices down year-over-year for the first time since 2013, there are some attractive deals to be had. Couple that with the best interest rates that we have seen in our lifetimes (and probably the lowest we will ever see), affordability has gotten much better.
With trillions of dollars (who can even fathom a trillion dollars?) of stimulus money being printed by the Fed, it suggests that inflation is going to be a part of our economic recovery. It is very likely that we will look back on this time and realize the smart ones were the people who capitalized on the cheap money available in today’s market. Oh, in case you were questioning that last statement, yes, there is cheap money available, if you know where to look.
And for the record, I can be fun…