Afternoon Bite 8/17/2020 (Video)

Every Monday afternoon Amber Kovarik and I talk about what happened this week in our local and national real estate market in 15 minutes or less.

Today’s Takeaways:

Second Quarter Earnings:

In the second quarter of 2020, the total number of closed residential real estate transactions was down 17.8% year over year. This is because April and May were very low contract writing months. June was up. July even more so. (NAR) The drop in transactions is reflected in the Q2 2020 earnings reports from the major publicly traded real estate firms. Only three had year over year revenue gains.

  • Zillow: year over year revenue increased by 28%.
    • Hit a site-traffic record of 2.5 Billion visits.
    • iBuyer acquisitions dropped to the lowest levels since Q2 2018.
  • eXp World Holdings: year over year revenue increased by 33%.
    • Much of the growth is credited to headcount growth.
  • Redfin: year over year revenue increased by 8%.
  • RE/MAX: year over year revenue dropped by 24.2%.
  • News Corp, parent company of Move Inc which owns Realtor.com: year over year revenue declined by 6%.
  • Realogy, parent company of Coldwell Banker, ERA, Sotheby’s, Century 21, and Better Homes & Garden: year over year revenue decline of 27%.
  • Keller Williams: closed transactions were down 15.4% and sales volume was down 15%. (Privately owned company and shares limited data)

Softbank Vision Fund, the primary source of funding for companies like Opendoor and Compass Real Estate posted profits in Q1 2020 after three-quarters of billion-dollar losses.

Unemployment:

  • New unemployment claims dropped below 1M for the first time since the onset of the pandemic in March. 963,000 new claims were filed last week.
  • Continuing unemployment claims decreased by 604,000 to just under 15.5M
  • During July 1.8M new jobs were added bringing us down to a 10.2% unemployment rate.
  • The jobs added were mostly in leisure and hospitality, government, and retail (US Department of Labor)
  • The average American homeowner has $177,000 in equity. (KCM) This means that a financially burdened homeowner does not have to go through a foreclosure or short sale in order to sell the property.

Housing:

Sales & Prices: Phoenix metro area closed sales are up over 10% month over month and up 15% year over year. The median sales price is $319,490, up 3% month over month, and 12.5% year over year. Healthy appreciation is 3% annually.

Lending:

  • Fannie Mae and Freddie Mac instituted a 0.5% refi fee for FHA and VA refinances. Adding on average of $1500 to the borrower’s closing costs for $300,000 refinances.
  • Rates are up slightly but still locking in people under 3%.
  • Appraisals are coming in low. Be sure to have the conversations with the appraisers. Give them the comps and ask questions.

Published by Sarah Perkins

Sarah has been with Lawyers Title of Arizona since 2004. As an award-winning sales executive, Sarah's role is to bring transactions to Lawyers Title. To do this, she focuses on supporting her clients and helping them navigate the ever-changing real estate space through thorough research and understanding of current trends impacting today's home buyers and sellers.

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