Tacoma – Today’s Real Estate Market Report and Housing Market Predictions 2020
Unemployment? Election? Inventory? |November 2020 Market Update
How does what’s happening in the economy have an impact on the real estate market. Obviously one would think that with all the craziness, somethings gotta give right. Well, I completely understand your concern, it’s valid…………..it can be scary………..some people may have to sell and they don’t have a choice because of a job transfer or loss. But some may just be wondering if they should hold on and see if the market goes up so that they can get a better return on their investment, or others may feel like they need to sell now so they can Keep all the equity in case the market does go down. There are certain factors and variables that can cause housing markets to go down, and those factors also can have a positive or negative affect on the housing market as well. Hi I’m Anne Curry with Anne Curry Homes and Better Properties. Unemployment is one contributing factor and it was lower pre-pandemic and then spiked pretty high from April to July hovering between 8 and 14%, but it has been coming down month after month since April, which is a positive sign. Obviously, we are hoping it keeps coming down.
Experts are projecting that it will continue to drop. There have been several recessions in the U.S. throughout history, but if you look historically at the times during recessions where the number of months that unemployment was greater than or equal to 9% the recession of 2020 is the lowest. It puts the unemployment perspective where we are right now, nowhere near what it was in the past. The Great Depression has 108 months, Great Recession had 30 months, 1980’s Oil Recession had 19 months and in 2020 we’ve only had 4 months where the unemployment rate was greater than or equal to 9%. Also, the number of people in active forbearance is decreasing. It’s continued to go down since May. So more people are paying their mortgages as they are getting their jobs back.
Many people are wondering what will happen due to the election? I would recommend looking at a few factors, 1. Inventory is inventory, back in 2008 the levels of inventory were very high putting us into a buyers market, home prices were depreciating because there was so much supply, today inventory levels are very low, showing that it is a sellers market and prices are going up because buyers are paying more to secure the homes. Also, right now the percentage of equity that homeowners have is very strong. John Burns Consulting tells us that 42.1% of the homes owned in the Country are owned free and clear, they have no mortgage. And that 90% of homes have at least 10% equity which indicates that less homes will go into foreclosure due to the equity they have. So there is a lot of data that points to a positive forecast for the housing market in the future. Feel free to reach out to us at no cost or risk for a hassle free strategy session. I’m looking forward to hearing from you.
What Are The Projections for Housing Prices According to The Experts?| October 2020
The market is as hot now as it was in 2006 housing boom days. With housing being so similar today to back in 2006 right before the crash, many homeowners are worried about the market right here in Pierce County crashing like it did in 2008. The good news right now is that Foreclosures and short sales according to N.A.R. represented less than 1% one percent of the sales in August. I totally understand your concerns, I was selling homes back when the market crashed and I saw around an average of about a 75% decrease in home prices. I sat across many homeowners who lost their home to short sale or even worse foreclosure. It was horrible. So the question that many people are wondering is, “Is that going to happen again”. Honestly, as experienced as I am in Real Estate, I just don’t know.
But, what we can do is look into the facts as much as we can. #1. One thing we all can be certain about, is that there isn’t much to be certain about. I mean really, I’m not trying to be a pessimist, but it’s also very important to be as much of a realist as possible. We cannot truly foresee what the housing market will do. One thing we are seeing and are certain of is that there are a lot of people still losing their jobs and we are still seeing many restaurants and small businesses close down, and much of that is on a local level, so it’s scary. We also don’t know how long this pandemic is going to last and what the economic foresight will be on the economy as a whole or on the housing market. But here are a few things we do know as of right now, and just like there’s a new social media site that takes over in just a few days, or just as quickly as technology changes, well my viewpoint may also change before this video even gets out. But as of now, what we are seeing locally in Tacoma Washington 98407 and 98406 is that homes are selling very quickly. The lower the price of the home, the more offers and competition we are seeing, recently we had 22 offers on a property we listed. That means 21 buyers did not get the home. For buyers, getting an offer accepted of 500,000 is very competitive because inventory is so low which makes it definitely a seller’s market.
In my humble opinion, there are several reasons for this. One, is that a lot of sellers were holding off earlier in the year due to the uncertainty of what’s happening in our world, Also, interest being at nearly record lows, allow more buyers to enter the market, and also given that we are in an election year which is just right around the corner, historically housing tends to stay good during these times. So, with the market looking so good, many people are asking if I feel it will continue to significantly go up. I must advise that I do not foresee the market going up significantly over the next year. I feel that once the election is over and the president settles in, then we may see the negative effects of what’s happening globally will take a toll on the housing market. I just can’t see with all of the jobs that are being lost and businesses both locally and nationally closing down, how that cannot have a negative impact on the housing market. So throughout the 25 years in this industry when seller’s in the past have come to me around this time and asked me if they think its a good idea to sell now, with the Holidays’ around the corner, I’ve always recommended that if they can wait to list, it was probably better and to try to list their home right after the holidays and to shoot to have it ready to be active for sale by around January 11th or so, and in previous years, I would recommend waiting. However, that is NOT what I am recommending now when sellers call me and ask my opinion.
I think now is an opportune time to sell given the low interest rates, dramatically low level or inventory on the market and high buyer demand, also the unlikeliness that home prices in this area will go up much more than they already have given where we are located and the uncertainty of what lies ahead, I think it is an opportune time to sell. According to Lawrence Yun, the National Association of Realtors chief economist he says and I quote “Shortages of homes for sale have proven problematic in the housing industry over the last few years, but have grown even worse in recent months. “Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” says Yun, end quote. I agree and believe that now is an opportune time to sell so much that I’ve personally sold a few of my properties recently, I’m eating my own dog food and putting my money where my mouth is so to speak regarding the advice that I’m giving. Now that’s just my personal opinion and I don’t have a crystal ball, but I will say that I’ve been pretty good at forecasting market trends in the past based upon my extensive involvement in the market. Hope that helps everyone and please reach out to me if you have any further questions or need any additional help. As always, make it a great home selling and buying day. We’re always here to serve you, Make it a great home selling and buying day.
How can we compare what’s happening Nationally in the Real Estate Housing market right now in 2020 as compared to when the market crashed in 2008. Well, finally some good news. According to N.A.R. the National Association of Realtors in August short sales and foreclosures accounted for less than 1% one percent of the sales. As compared to 2008. According to
CNN Money, foreclosures were at a record high of 81% in 2008. That’s a drastic difference.
What else is different, we have higher standards for loan qualification. If you look at this graph from the Mortgage Bankers Association, back in 2008 it was very easy to get a loan as compared to today. In 2008 they had stated income loans, meaning you could just state what you made and they would take your word for it without ever checking. As compared to now, 2020, the Mortgage Credit Availability Index shows how difficult it is to get a loan. Now they check and recheck employment, debt to income ratios, credit scores and so much more.
Let’s explore what other scenarios make 2008 so different than today. Well, we had a surplus in housing back in 2008, there were more homes for sale than there were buyers and now we have a shortage of inventory in fact According to Lawrence Yun, the National Association of Realtors chief economist he says and I quote “Shortages of homes for sale have proven problematic in the housing industry over the last few years, but have grown even worse in recent months. Just look at this graph from FRED Economic Research. Again, a drastic difference in inventory from 2008 to now, and remember when there is a surplus in inventory, that is a buyers market, which tends to cause prices to go down, however, when there is a lack of inventory like there is today, it is considered a sellers market and tends to drive prices up. Well what about unemployment, according to Google, the U.S. The Bureau of Labor Statistics reported unemployment in August 2020 to be at 8.4 percent and back in 2008 unemployment was reported from the same agency at 6.1 percent, so definitely up, but unemployment does not appear to be up as drastically as it may appear.
So, lots of facts and jargon, so what are your thoughts about how the housing market now in 2020 compares to the crash. In my opinion, it’s all of the factors that led to a significant decline of housing prices are very different as compared to today and hopefully even with all that we have going on in our crazy world today, those differences will have a positive effect on the housing market. Always here to help and please reach out to us here at any time at Anne Curry Homes for any of your Community or Real Estate needs. And be sure to make it a great home selling and buying day.
Market Update | September 2020
What are the projections for housing prices according to the experts? What’s going to happen? This seems to be the question of the hour, we get asked constantly. I’ve been in the industry for over 25 years and sold thousands of homes, and I don’t think there has ever been a time of so much uncertainty, so I can see how it can be scary. So what is going to happen, well, obviously, I don’t have a crystal ball, but let’s look at what the real estate experts and advisors across the nation are forecasting. Only two of the major organizations are saying that we will decline. Seven of the nine are projecting house prices to go up ranging from about 2.3% (two point three percent) to 4.4% percent. We believe that the lack of inventory has a significant impact on the projections going up. Right now we can’t bring homes to market as fast as people are buying them. Locally we are seeing prices increase substantially in certain areas and the demand from buyers is substantial. This is also happening nationally, let’s look at a quote from Move.com “Summer home buying season is off to a roaring start. As buyers flooded into the market, Realtor.com monthly traffic hit an all-time high of 86 (eighty-six) Million unique users in June 2020, breaking May’s record of 85 million unique users.”
I personally feel that the low interest rates have a lot to do with buyer demand. The record-low mortgage rates have converted some prospective buyers into active buyers. Many times as economic downturn causes interest rates to go down, but as we see the economy recover we should assume that rates will go up. Remember, as interest rates go down, a buyer’s buying power goes up, meaning they are able to afford and qualify for more and their payment does not go up. Also, if you look at the amount of home purchase applications that were taken out from buyers, according to the MBA, Mortgage Bankers Association, we see that we have 11 (eleven) straight weeks of year over year increases in application for a loan to purchase a home from buyers.
So according to experts and analysts across the country, the projections are positive. For more information or to just chat about what may or may not be best for you, we look forward to hearing from you here at Anne Curry Homes. And as always, make it a great home selling and buying day.https://youtu.be/GZvqGHNy9WU
Market Update | August 2020
Did know that from a Lending Tree Study, 87%, eighty seven percent of home sellers were concerned that their home won’t sell because of the pandemic and resulting in an economic recession. This could not be more untrue right now. Right now is an amazing time to sell your home. Why, because inventory levels here in Tacoma Washington 98407, 98406. In fact, right now the inventory is lower than it was in January which is traditionally historically here locally one of the lowest inventory level months. But, what’s so interesting about this is that the buyers are in full demand. They are out in full force making offers. In fact Zillow reported that newly pending sales are up 18.8 eighteen point eight percent month over month, but total listings are down 20.7 (twenty point seven percent), so there just isn’t the inventory in the market to support the buyers high demand. So why are buyers in a buying frenzy??? Why, because interest rates are low, they can afford more home right now and put less money down, and their payments will be less because the interest rates are lower. In many cases it’s actually more affordable to own a home than it is to rent one, especially if you take into consideration the tax saving advantages from owning a home. So what does all of this mean? Well, according to all of the experts, if you take a look at this graph right here, with the exception of one, 5 five of the experts are anticipating an increase in home prices through 2022 and 3 three out of the 5 five, are anticipating over a 3% three percent appreciation through the end of the year. This is summed up nicely by Zelman and Associated June 25th Broker Report which states, and I quote, “The severity of inventory tightness should remain a relative benefit to home prices, but it is also a risk factor to the degree of rebound in unit sales going forward.” So inventory is going to have a massive factor, the lack of supply is helping prices go up. So, it’s not just a good time to sell, it’s an amazing time to sell. We can give you so much more information and details if we can meet, and don’t worry we can meet virtually as well. Give us a call and we’ll be happy to help you sell your home here in Tacoma Washington 98407.
Market Update | July 2020
Can I Skip My House Payment?
What About Me?
Buyers are back in action. Just two months ago, things nationally were at a slow down. We’re seeing multiple offers and bidding wars on a lot of properties. Home prices are going up, both nationally and locally, here in Tacoma and surrounding areas due to the high demand. Buyer traffic is increasing here in the west as much as 20.9% more than last year. The same is true as sales, as compared to this time last year. Sales are up nationally as much as 10.8%
George Ratiu, senior economic advisor for Realtor.com says, “The nation is struggling with an under supply of housing.” The number of homes for sale are poised to reach historically low level. Nationally, we only have about two to three months worth of inventory of homes for sale, meaning it would only take two to three months to go through all the inventory of homes for sale on the market. Inventory hasn’t been this low since 1993. How does that affect the market nationally and right here locally in Tacoma market and the surrounding communities? Well, with less houses on the market and more buyers to buy, that generally means that prices are going to increase.
The other thing important to note is that interest rates are anticipated to continue to go down. Barry Habib, one of the most accurate real estate forecasters predicts that interest rates are going to continue to go down, maybe even reaching 2%. We’ve also got the election coming up and these factors can also contribute to lower interest rates. That means that the markets should stay strong, so it’s time to take action.:
If you’ve been sitting on the fence thinking that house prices were actually going to go down, it doesn’t look like that’s going to happen, and if you’ve been thinking about selling with the lack of inventory, now’s a good time.
So, if you have any questions, anything real estate related or community related, we at the Anne Curry Homes are here to help. So do me a favor. Feel free to reach out. We love what we do. We love our city, and we love our community and we would love to serve you.