In this 12 minute video Amber Kovarik and I talk about what is happening this week in real estate.
Today’s Takeaways.
Right now there are a lot of headlines about how the housing market is softening, that we are turning into a buyers market. That is not the case. What is the case is that there was a slight decrease in contract signings from September to October, a 1.1% decrease. That doesn’t mention that there was still a 20% year over year increase. Seasonality could be coming into play now, in that it does get a little quieter around the holidays. What the bigger factor is lack of inventory. A buyer cannot write an offer on a property that is not for sale.
To put it in perspective, in the US there are about 140 million housing units. Of those, about 84 million are single family homes. (Greater Phoenix has about 2 million housing units and just over 1.4 million single family homes) Last week, for the first time in history, the number of single family homes for sale nationwide dropped to just below 500,000.
Greater Phoenix has about 4 buyers for every available listing. In order for the Phoenix market to be balanced we would need 25,000-35,000 active listings, we have 7,300. Aside from New York and San Francisco all other major metros are in similar situations. There are some areas in the country that have sufficient inventory for the demand giving us a national average of about 3 buyers for every listing nationwide.
Interesting Facts.
- Demand for primary homes is up 50% and for second homes is up 100%, year over year (Redfin)
- 19% of buyers paid cash in 2019 and 2020. (HousingWire)
- For the fourth time, FHFA extended the foreclosure and eviction moratoriums to January 31, 2021. (HousingWire)
- Mortgage interest rates have hit all-time lows 14 times this year. (MBA)
Every time we get news that is not favorable for the economy interest rates have gone down. There is so much uncertainty that the fed has just keeps buying more and more mortgage-backed securities. It likely will not go much lower.
Appraisal delays continue. 45 day escrow periods can help make things go more smoothly. Bring on the harmony to a real estate transaction!
With the new conforming loan limits a buyer can now purchase a property for $577,000 with 5% down without having to get a jumbo loan.
With the new FHA limits a buyer can now buy a property for $381,000 with 3.5% down.
Sarah Perkins is an award winning account executive and has been in title sales since 2004. As the Director of Industry Research & Senior Account Executive, Sarah’s role is to bring real estate transactions to Navi Title. Sarah supports her clients by helping them navigate the ever-changing real estate space through thorough research and understanding of current trends impacting today’s home buyers and sellers.