In this 9 minute video, Amber Kovarik and I discuss the latest in real estate, lending, and the economy. The biggest topics continue to revolve around shrinking inventory, sly-rocketing prices, and low-interest rates. Here is the latest:
One – Inventory:
Nationwide and locally our low levels of inventory continue to be a challenge. Nationwide we have fewer than 390,000 single-family properties available. Here locally we have less than 5400 active listings. According to the Cromford Report, we are 73% below where we should be for inventory to support our population. Demand remains over 28% above normal.
“This is what we call the homeowner prisoner’s dilemma. There’s nothing to buy because nobody is selling, but nobody is selling because there’s nothing to buy.”Mark Fleming, First American
Two – Appreciation:
The classic supply and demand imbalance continues to push prices up quickly. Nationwide we had appreciation of 13% in 2020 and nearly 17% here in greater Phoenix. Nationwide, the seller’s market actually started in 2012 and here in Phoenix it started in 2014, the crash hit Phoenix extra hard. The 6 years leading up to 2020 our markets appreciated 8%-10% in each 2018 and 2019. The market intensity had been growing leading up to 2020.
Three – Affordability & Policy:
The main underlying theme for housing in 2021 is affordability. The speed of today’s appreciation combined with the years of significant appreciation make things really tough on our current buyers. Expect more policy and programs coming out of DC addressing this issue. The latest proposed stimulus includes eviction, foreclosure, and forbearance extensions through September 30, 2021 which above and beyond the recent executive orders extended those programs through the end of March. The proposed stimulus includes another $30 billion for rental assistance to help landlords.
Four – Zillow News:
Zillow is officially a brokerage with agent-employees who will represent Zillow for its acquisitions and sales through its iBuyer program, Zillow Homes. This changes a few things for consumers. The Zestimate will now be far more accurate as Zillow now as a direct IDX feed connected to the MLS versus negotiated feeds set up with brokers, companies, and MLS’s. Buyer agents will now be called “personal guides” and will be showcased separately from the listing agent for each listing on the site. Also, Zillow is no longer offering free rental listings. In order to post rental listings the agent either pays $9.99 a week or their brokerage has a contract through a Feed Connection Program.
Five – The Economy:
Many economists are bracing for a rough winter. Consumer sentiment may take a hit. There are struggles with continued lockdowns leading to continued layoffs and high unemployment. But as the vaccine continues its rollout and the economy reopens these economists expect a strong recovery in Q2 or Q3 of this year. Businesses will open back up, people will go back to work, people will spend money on entertainment again. Since it was not an economic event that stopped the machine, they expect it to start right back up again and go straight back into a bullish economy.
Six – Lending:
Borrowers continue to struggle when writing offers when they need down payment assistance or ask for closing costs. Nearly no one with closing cost requests are getting them. Finding other options outside of down payment assistance programs is best for getting offers accepted.
At the beginning of the year rates went up after the Georgia election and rose more several days in a row before retreating again. Rates are now 1/8 point lower than they were last week.
The Federal Reserve meets Wednesday. They are expected to vote to continue buying mortgage-backed securities at a rate of $40 billion a month. Their goal is to keep rates low to continue the buyer demand.
For details and registration for Amber’s upcoming class, visit https://www.eventbrite.com/e/winning-offers-through-finance-tickets-137997092017
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.