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April 2021 Housing Market Update
Green Team Realty’s April 2021 Housing Market Update was held on Tuesday; April 20 at 12 p.m. Geoff Green, President of Green Team Realty, welcomed viewers.
If you missed the webinar or would like to view it again, it is available here:
Snapshot of Year-over-Year Changes in Key Metrics
- Showings are up 49%
- Purchase applications, up 39%
- Pending deals, down 0.5%
- Existing homes sales, up 9.1%
- New Home Sales, up 8.2%
- Existing inventory is down 52%
- New Home inventory down 4.6%
Inventory at historic lows?
What else are we talking about in our April 2021 Housing Market Update?
Housing Market Stats – National and local levels
“Housekeeping” Items
Hear from our Panelists
Geoff was joined by panelists Tammy Scotto of Green Team New York Realty, and Kristi Anderson of Green Team New Jersey Realty. In addition, Laura Moritz of Classic Mortgage was there to share her expertise as a mortgage specialist.
To hear the panel discussion, click here for the webinar.
We’ll see you on Tuesday, May 18 at 12 p.m. Sign up for Housing Market Updates at:
HMupdate.com
February 2021 Housing Market Update
Geoff Green, President of Green Team Realty, welcomed everyone to the February 2021 Housing Market Update. The webinar, held on February 16 at 12 p.m.. examined the housing market on both national and local levels.
If you missed the webinar or would like to view it again, it is available here.
Meet our Panel
Geoff was joined by panelists Keren Gonen, Kristi Anderson, Barbara Tesa, and Pam Zachowski, all of Green Team New Jersey Realty. In addition, Michael Giannetto of Cross Country Mortgage joined the panel, sharing his expertise.
Let’s Get National
“Existing home sales totaled 5.64 million in 2020, up from 5.6% from 2019 and the most since before the Great Recession.” – NAR
“Home seller profits skyrocketed in 2020. Seller profit on typical sale in 2020: $68,843. Up from $53,700 in 2019 and $48,500 in 2018.” – Atom Data
As Geoff has pointed out throughout 2020, sellers were the ones benefitting from that market. The amount of money made by sellers in 2020 was historic. Furthermore, price projections for 2021 signal an average of 5%. Historically, the housing market appreciates by approximately 3.8%.
Low mortgage rates have been driving the sustained market and affordability. The projections are showing that rates will start to climb from 2021 into 2022. However, the increases are not major. Predictions are a gradual increase to 3.2%.
Inventory at a historical low point
“Total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million). Unsold inventory sits at an all-time low 1.9-month supply at the current sales pace, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019. NAR first began tracking the single-family home supply in 1982.” – NAR
Working from home
According to this 2020 Panel Consensus Forecast from NAR, there is a shift towards working from home since 2019. While down from 2020, the forecasts for 2021 and 2022 are at least twice as much as 2019. Geoff sees a restructuring of business models as employees and businesses see benefits of working from home.
What else are we talking about?
We’re talking about the price of lumber and new home sales activity. Also, exiting forbearance plans, housing affordability, and equity benefit of price appreciation
All of these topics are discussed in the February 2021 Housing Market Update.
Housing Market stats on national and local levels
Existing home sales and prices were up, with inventory way down, making for a true supply and demand marketplace.
“Housekeeping” Items
Hear from our Panelists
Finally, the realtors, all from Green Team New Jersey Realty this month, and Michael Giannetto of Cross Country Mortgage, discussed what they are seeing “on the ground.”
Again, if you missed the webinar, you can watch it now to hear the panel discussion. Just click here. And below is the contact information for this month’s panelists.
We’ll see you on Tuesday, March 15 at 12 p.m.
Sign up for Housing Market Updates at GreenTeamRealty.com/HMU
Housing Market Update January 2021
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Geoff Green, President of Green Team Realty, welcomed everyone to the first Housing Market Update of 2021. Held on January 19 at 12 p.m., the webinar examined the housing market on both national and local levels.
If you missed the webinar or would like to view it again, it is available here.
Meet the Panel
Geoff was joined by Jennifer DiCostanzo and Tiffany Megna of Green Team New York Realty. Keren Gonen and Kristi Anderson of Green Team New Jersey Realty shared their knowledge of the Sussex County, NJ market. Finally, Kenneth Aulicino, Senior Loan Officer at Family First Funding LLC shared his expertise.
Where we were and where we are
The above image shows the contrast between the years leading up to the housing market crash of the Great Recession, compared to the past 6 years. Geoff pointed out that, even though we are in a recession, it doesn’t necessarily mean that home prices will come down. In fact, in four out of six recessions, home prices actually increased. That is true for 2020. Furthermore, it is anticipated that home prices will continue to rise.
In fact, the impact of Covid-19 has impacted the real estate market in many ways. According to David Mele, President at Homes.com
“The surge in the work-from-home population has rewritten the playbook for many homebuying and rental decisions, from when and where to relocate, to what people are looking for in their next residence…”
A survey by Redfin shows that 34% of homebuyers have already moved to a different city or area since the pandemic began. Furthermore, another 33% would consider moving if given the opportunity to work remotely on a permanent basis.
Unemployment, interest rates, and more
Discussion ensued on unemployment projections and how long it might take for unemployment rates to return to near pre-crisis level. Job loss and its impact on renters may make it difficult for them to become future homeowners.
Housing Market Stats – National and Local
National existing home sales have increased, accompanied by a major increase in home price and major decrease in supply of inventory. These trends reflect what is happening on the local level, too.
“Housekeeping” Items
Contact our Panelists
The panelists discussed the impact of the pandemic on the local Orange and Sussex County real estate markets. Covid-19 and the necessity of (and possibility for) many people to work from home has changed priorities, needs, and wants of many perspective home buyers, particularly those from New York City. To view the panel discussion, click here.
We’ll see you on Tuesday, February 16, 2021, at 12 p.m.
Click here to register.
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Housing Market Update December 2020
Geoff Green, President of Green Team Realty, welcomed everyone to the December 2020 Housing Market Update. This webinar, held on Tuesday, December 15, at 2 p.m., examined the housing market on both national and local levels.
If you missed the webinar or would like to view it again, it is available here.
Meet the Panel
Panelists included Keren Gonen and Pam Zachowski of Green Team New Jersey Realty, Toni Kreusch, and Karen Gauvin of Green Team New York Realty. Michael Giannetto of CrossCountry Mortgage LLC joined them.
2020 – The Year in Review
What a year it has been! The real estate industry has had a strong year. The housing market has experienced a “V-shaped” recovery. Furthermore, according to Realtor.com, it continues to ascend based on demand, supply, price, and time on market.
There are no signs of an impending foreclosure increase. In fact, the number of mortgages in forbearance is decreasing.
Are prices going up too fast?
Geoff Green addresses this question, using actual and historic appreciation factors. However, it all comes back to supply and demand, as shown below. The less inventory you have, the more demand and prices go up.
Lawrence Yun, Chief Economist at NAR, explained why there is no comparison between today’s market and the frenzy of activity seen in 2006, which led to the recession. You can view his full quote in the December 2020 HMU video. Also, the good news is mortgage affordability based on household debt service as a percentage of disposable personal income. Furthermore, mortgage rates are projected to remain low in 2021, and home prices continue to increase.
The new Winter 2021 Buyer and Seller Guides are now available on the Green Team Realty website.
Click here and scroll halfway down the screen to request your guide.
Housing Market Stats – Nationwide and Local
Existing home sales have risen, and home prices continue to soar. Of course, inventory continues to plummet. Locally, average prices have soared. The panelists discussed the impact of current market conditions on both buyers and sellers, and what they are seeing in their businesses. You can see the panel discussion here.
“Housekeeping” Items
Contact our Panelists
We’ll see you on Tuesday, January 29, 2021, at 12 p.m.
Click here to register.
November 2020 Housing Market Update
Geoff Green, President of Green Team Realty, welcomed everyone to the November 2020 Housing Market Update. The webinar, held on Tuesday, November 17 at 2 p.m. examined the housing market on both national and local levels.
If you missed the webinar or would like to view it again, it’s available here:
Meet the Panel:
Panelists included Keren Gonen and Barbara Tesa, of Green Team New Jersey Realty and Carol Buchanan, with Green Team New York Realty. Also joining the discussion were Ken Ford of Warwick Valley Financial Advisors, and Laura Moritz with Classic Mortgage LLC.
First, let’s talk about the economy
In January, the economy was strong, there were no signs of the housing market slowing down. It took a major global event to slow down a roaring economy.
So, what did people do with stimulus checks?
35% used it to pay down debts. 36% saved the money, and 29% spent the money. U.S. Consumer spending since January 1, 2020, is down by -3.7%. Changes in consumer spending by state is shown below:
Unemployment filings and benefits
Weekly unemployment filings have been steadily coming down. However, unemployment does remain at a high number. The number of people receiving unemployment benefits is also trending downwards.
Mortgage Forbearance, Home Inventory, Home Appreciation, and Mortgage Rates
The number of mortgages in active forbearance is decreasing dramatically. As of Oct 20, out of 2,397,000 families granted forbearance, some have extended it, However, 44% came out of the program while paying on time. In addition, 500,000 people paid off their mortgage.
Moreover, stats show the decrease in inventory over the last 12 months. According to Zillow, the top reasons for people not putting their homes on the market now are financial uncertainty, uncertainty about life in general, and COVID-19 health concerns.
Most experts are bullish on home price appreciation. However, Mortgage Bankers’ Association is predicting rising mortgage rates over the next 3 years.
Learn more. Watch the Webinar.
For updates on what is happening in commercial real estate, the crisis facing renters at the end of moratoriums, and national and local market stats, click here.to watch the webinar. You’ll also be hearing from the sales associates, and financial and mortgage experts on what they are seeing in the market.
Furthermore, you can compare this month’s stats with those in the October Housing Market Update.
“Housekeeping” Items
Contact our Panelists
Join us for the last Housing Market Update of 2020 on Tuesday, December 15 at 2 p.m.
Sign up for updates now at GreenTeamRealty.com/HMU
October 2020 Housing Market Update
Geoff Geen, President of Green Team Realty, welcomed everyone to the October 2020 Housing Market Update. The webinar, held on Tuesday, October 20 at 2 p.m. examined the housing market on both national and local levels.
If you missed the webinar or would like to view it again, it’s available here.
Meet the Panel
October Housing Market Update panelists were Nancy Sardo, and Tammy Scotto of Green Team New York Realty, and Keren Gonen of Green Team New Jersey Realty. Also joining the discussion was Ken Aulicino, Mortgage Loan Originator at Family First Funding.
Can the housing market recovery be sustained?
The U.S housing market has been a “V-shaped” Recovery. However, inventory continues to decline and is a big challenge. So, can the housing market keep it up?
Pros
US Consumer Spending is almost in a V-shaped recovery. Unemployment has been coming down the last 6 to 7 months. The number of mortgages in active forbearance is decreasing. Prior to the Great Recession, it was a buyers market, due to the number of homes on the market. In the early 2000s, there was also a lot of new construction happening. Now, we are firmly in a sellers’ market. There are just not enough homes to satisfy the needs of the current market.
Cons
The shortage of inventory remains a major issue. According to Realtor.com,
“Since the beginning of the COVID pandemic in March, nearly 400,000 few homes have been listed compared to last year, leaving a gaping hole in the U.S. housing inventory…
As a result, home prices are accelerating at double last year’s pace.”
According to the National Association of Realtors, Existing Home Sales are up by 10.5%. However, listings are down 39%. Listings for New Homes are down by 31%. However, sales of new homes have increased by 43%.
This really shows the inventory story.
Local Stats
In Orange County, NY, there are increases in units sold and in average sales price. Sussex County, NJ is now showing strong increases in average sales price, as well as in units sold.
Learn More, Watch the Webinar
Watch Geoff’s full presentation on national and local economic and real estate trends. In addition, our expert panel discusses their experiences in this market, including new construction. Click here to view the webinar.
Furthermore, you can compare prior statistics and trends. Click here for the September 2020 Housing Market Update.
“Housekeeping” Items
Contact our Panelists
Join us on Tuesday, November 17 at 2 p.m.
Sign up for updates now at GreenTeamRealty.com/HMU
September 2020 Housing Market Update
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[et_pb_column type=”4_4″][et_pb_text admin_label=”Text”]Geoff Green, President of Green Team Realty, welcomed everyone to the September 2020 Housing Market Update. The webinar, held on Tuesday, September 15 at 2 p.m., examined the housing market on both national and local levels. Discussion included the impact of various economic factors resulting from the COVID-19 pandemic.
If you missed the webinar or would like to view it again, it is available here.
Meet the Panel
September Housing Market Update panelists were Kristi Anderson and Keren Gonen of Green Team New Jersey Realty. They shared their knowledge and expertise in the Vernon and Sussex County, New Jersey markets. Carol Buchanan, Green Team New York Realty, shared her experiences with the Warwick, Orange County, New York markets. In addition, our guest panelist was Michael Giannetto of Cross Country Mortgage. Michael shared his expertise on the
First, here are some stats on the national and local markets, presented by Geoff.
We’re Up, Up, and Away
July marked ten straight months of year-over-year gains in price. In addition, we have first time ever, national median home prices breaching the $300,000 level. With the easing of lock-down regulations, showing traffic is now way up, year over year. Mortgage applications, year-over-year, are also popping. Realtor.com’s chief economist says that inventory is down 38%.
Demand is way up, supply is way down
Builder confidence is also growing. It tied its highest reading in NAHB/Wells Fargo Housing Market index’s 35-year history. However, lumber prices have more than doubled since mid-April. The pricing of lumber should come back down, based on supply issues as opposed to supply and demand.
Housing affordability
The housing market is about affordability as opposed to just pricing. While prices continue to go up, mortgage rates have been going down. Thus, lower mortgage rates make buying a home more affordable.
Learn more, watch the webinar
Watch Geoff’s full presentation on national and local economic and real estate trends. In addition, hear our expert panel discuss their experiences in this market. Click here to view the webinar.
Furthermore, compare prior stats. Click here for the July 2020 Housing Market Update.
“Housekeeping” Items
Contact our Panelists
Join us on Tuesday, October 20 at 2 p.m.
Sign up for updates now at GreenTeamRealty.com/HMU
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A Historic Rebound for the Housing Market
[et_pb_section fb_built=”1″ _builder_version=”3.0.47″][et_pb_row _builder_version=”3.0.48″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.0.47″ parallax=”off” parallax_method=”on”][et_pb_text _builder_version=”3.0.74″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”]Pending Home Sales increased by 44.3% in May, registering the highest month-over-month gain in the index since the National Association of Realtors (NAR) started tracking this metric in January 2001. So, what exactly are pending home sales, and why is this rebound so important?
According to NAR, the Pending Home Sales Index (PHS) is:
“A leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.”
In real estate, pending home sales is a key indicator in determining the strength of the housing market. As mentioned before, it measures how many existing homes went into contract in a specific month. When a buyer goes through the steps to purchase a home, the final one is the closing. On average, that happens about two months after the contract is signed, depending on how fast or slow the process takes in each state.
Why is this rebound important?
With the COVID-19 pandemic and a shutdown of the economy, we saw a steep two-month decline in the number of houses that went into contract. In May, however, that number increased dramatically (See graph below):
This jump means buyers are back in the market and purchasing homes right now. Lawrence Yun, Chief Economist at NAR mentioned:
“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
But in order to continue with this trend, we need more houses for sale on the market. Yun continues to say:
“More listings are continuously appearing as the economy reopens, helping with inventory choices…Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”
As we move through the year, we’ll see an increase in the number of houses being built. This will help combat a small portion of the inventory deficit. The lack of overall inventory, however, is still a challenge, and it is creating an opportunity for homeowners who are ready to sell. As the graph below shows, during the last 12 months, the supply of homes for sale has been decreasing year-over-year and is not keeping up with the demand from homebuyers.
Bottom Line
If you decided not to sell this spring due to the health crisis, maybe it’s time to jump back into the market while buyers are actively looking for homes. Let’s connect today to determine your best move forward.
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April 2020 Housing Market Update
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Covid19 has caused economic turmoil, health crises and uncertainty. However, a historical perspective may help us manage emotions and enable us to see what is happening in the housing market and navigate it accordingly. Below is a recording of the Housing Market Update as well as a summary of the most important discussion points.
National – Historical Perspective
Will this be like 2008, the start of the great recession?
The Housing Market was greatly impacted at that time because it was the catalyst that caused the Great Recession. Home price changes during last 5 recessions indicate that recessions do not necessarily impact the housing market. In 3 of the last 5 recessions, housing markets actually increased.
Housing and Mortgage Crash
In 2007, 2008 and 2009, the annual home price depreciation was significant. However, at the time we were dealing with sub-prime lending, etc. However, looking further back, to the Dot.com crash and 9/11 market crash, there was a significant S&P 500 stock market correction. Yet prices in the housing market continued to increase. There were good fundamentals in place.
Annual Home Price Appreciation
In any marketplace, you have to look at overall values. Are assets undervalued or overvalued? With the run-up to 2008, from 2000 to 2005, there were major price increases year over year. 6.5% was the lowest increase, with the highest being 12.5%. However, since 2014, 6.4% has been the highest increase. We haven’t gone back to those major subprime lending issues that happened before.
Mortgage Credit Availability and Affordability
The Great Recession required mortgage industry restructuring. That, in turn, led to qualified buyers not being able to borrow. This time around, it’s a different landscape. We don’t have a subprime lending bubble in the residential housing market. Loans will be processed for good buyers with good credit. Mortgage requirements are tightening a bit, but not to an unreasonable level. Another analytic compares total home equity cashed out in the years 2005-2007 and 2017-2019. People were using their homes “like ATMs” during the former period. The leverage people are putting on their homes has dropped from $824 Billion during 2005-2007 to $232 Billion during 2017-2019. 53.8% of all homes in America have at least 50% equity.
The percentage of median income needed to purchase a median-priced home has dropped from 25.4% in 2006 to 14.8% today. Affordability is in much better shape, largely due to mortgage rates being very low.
The Impact of Unemployment
Concerns about job losses are very real. A breakdown of the April 3 Unemployment Report shows the different sectors affected. 59.5% are from restaurant services and drinking places. The accommodation industry, retail trade, temporary help services, child daycare workers, health care office workers and construction workers make up most of the balance. In other words, these are jobs that should be coming back as soon as these businesses can operate again. It may take some time until people are confident and comfortable enough to get back out there. The next numbers come out on May 8, 2020 and will be discussed during the May HMU.
Unemployment rates and home sales do not seem to have a direct relationship. Current Unemployment Rates were compared to past financial crises. In 1933, during the Great Depression, unemployment rates were at a high of 24.9%. Goldman Sachs is predicting unemployment to be 15% in 2020. They are also predicting that number to go down to 6-8% in 2021, 5% in 2022 and 4% in 2023.
Based on data from the US Department of Labor accessed by Haver Analysis, the current employment situation is more like a natural disaster than a recession. The problem is how long this natural disaster, Covid19, is going to last. There are many unknowns, and no answers. We’ll be tracking what happens as parts of the economy reopen.
Historical look at Existing Home Sales Price
The market was hot the first two months of 2020, with average home sale price higher in January and February than those months in the preceding four years. It will be interesting to see what the numbers show over the next several months.
The above analytic shows Existing Home Sales Prices from January 1999 to January 2020. Even if you bought at the peak of 2007 or 2008, as Geoff did, just before the housing market plunged, it took 8 years for the market to recover. Historically speaking, people moved after an average of 6 years. That number is now inching up to 9 years. The average homeowner generally doesn’t buy or sell during a period of up or down. They want to wait and gain equity in their home. However, if you are not going to buy, what will you do? Rent? If so, you’re not building equity, you’re not getting tax write-offs, and other benefits of home ownership.
Inventory
In 2007, there were 8.2 months of inventory. Right now there are 3.1 months of inventory available. The market is much hotter now than in 2007 (leading into the Great Recession). Geoff believes that now is a very good time to buy, and not a bad time to sell, either, as inventory levels are so low. Historically, 6 months of supply is an average market. We are now down to 3 months of inventory. He does not see this number climbing anytime soon. Many sellers are not putting their homes on the market now, wanting to wait and see what will be happening. And, while people have to weigh their options, the low inventory can benefit those putting their home on the market.
April 2020 Local Stats
Orange & Sussex Counties
In Orange County, Units Sold were actually better in March than in February. Average Sales Price was way up. In Sussex County, Units Sold and Average Sales Price both coming out at a good solid pace. It will be interesting to see what the stats reflect when we take a look at our next Housing Market Update. At that time we’ll see the impact of Covid closures and stay-at-home regulations.
Housekeeping Items
Panel Discussion
Geoff Green was joined by Ken Flood of Quest Financial Services and Ken Aulicino of Family First Funding LLC. Vikki Garby and Carol Buchanan of Green Team New York Realty and Keren Gonen of Green Team New Jersey Realty represented the real estate agents’ points of view. Discussion ranged from the current state of commercial and residential real estate markets. There was positive feedback on how agents are adapting to the Covid19 regulations and are still able to assist clients and close deals. All three agents spoke of strong, serious buyer interest. Ken Flood discussed the financial market and Ken Aucilino the mortgage industry. Because of the wealth of information and graphics as well as the fascinating panel discussion, it is highly recommended that you watch the webinar. Click here to view the April 2020 Housing Market Update.
Remember to sign up below for the next Housing Market Update
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February 2020 Housing Market Update
Geoff Green, President of Green Team Realty, welcomed everyone to the February 2020 Housing Market Update held on Tuesday, February 18 at 2 p.m.. Topics to be discussed include the coronavirus and its potential impact, as well as the upcoming elections and local stats. If you missed the webinar, click here to watch it now.
National Stats
Recession Talk
The above graphic reflects the views of economists surveyed by the Wall Street Journal. In 2018, 67% of economists thought that by the end of 2020 there would be a recession. As early as October of 2019, that number was 34.2%. However, in January of 2020, that number was down to 14.3%.The economy seems to be outpacing the expectations of many who are watching a variety of analytics very closely.
Shrinking supply, rising prices
There is no question that the housing market did end red-hot in 2019.. Prices are continuing to rise, inventory is still low. While builders are more optimistic, they are still not meeting demand. Later, Geoff and David Willner, a home inspector, will be sharing thoughts on why more new construction houses aren’t happening.
2019 Home Sales in every region
In 2019 existing home sales were increasing year-over-year in every region. There was also an increase in new construction in 2019 over 2017 and 2018. Everything was increasing throughout 2019, and is expected to continue through 2020.
Inventory shrinking
Inventory continues to be a problem. This is the lowest level of inventory in at least three decades. The months inventory of homes for sales is 3 months. A normal market is 6 months. a buyer’s market is 9 months. A seller’s market is below 6 months. There is nothing to indicate that this number will increase. It may actually decrease. The only thing that could possible turn that around would be new construction picking up in big ways. However, it is not that easy to bring new houses online with zoning ordinances, etc.
Strong Pricing
Back in the summer of 2018 we started to see different numbers and wondered if the market would rebound. It has rebounded strongly and price increases are anticipated for 2020. Every state is labeled in blue, indicating prices increasing. Corologic and other companies are predicting price appreciation.
The economy – where is it headed?
According to Jay Bryson, chief economist for Wells Fargo Economics Group, the economy is growing well and the expansion still has room to run. While slowing down a little, the economy is not showing signs of a recession. There is growth of approximately 2.1%. Unemployment rates are steady. We’re at a relatively low rate of inflation. Job growth is good. It does not seem as though anything is poised enough to stop the growth.
Local Stats
Units Sold
2020 numbers for January show units sold at its highest number in the last five years.
Average Sales Price
Average Sales Price is way up. January is showing a remarkable jump. It will be interesting to see how this plays out the rest of the year.
Ask-to-Sold Ratio
This is the last asking price versus what the property sold for. Again, the number is high. Sellers are only having to negotiate about 2% off the asking price. These are strong numbers. And they mean that buyers don’t have too much leverage in this market.
Days on Market
The lower the number of days, the stronger the seller’s market it is. There has been a downward trend, year-over-year, and we’re starting 2020 at the same low mark as 2019. This is a strong number.
Units Sold
Units sold is same number as 2017. While not starting out at the highest level, it is still a pretty good level for Sussex County.
Average Price
Average price is up over the last five years, so that’s a good sign for people looking to sell their homes in Sussex County.
Ask-to-Sold Ratio
This is the last asking price versus what the property sold for. Again, the number is high. Sellers are only having to negotiate about 2% off the asking price. These are strong numbers. And they mean that buyers don’t have too much leverage in this market.
Days on Market
Again, this is the lowest level in five years in Sussex County. Things are going quickly.
Housekeeping Items
Join us for the next Housing Market Update, Tuesday March 17 (St. Patrick’s Day) at 2 p.m. Stay informed. Sign up for our Housing Market Updates at: GreenTeamRealty.com/HMU.
Thanks to our sponsor, REALLY, the Real Estate Referral Community. REALLY is where Professionals who serve the Real Estate Industry can connect, communicate, and securely exchange referrals with speed and ease. The best part? No fees on commissions exchanged between Agents. Join for free at ReallyHQ.com
Panel Discussion
Panelists were Geoff Green, President, Green Team Realty and Dave Willner, Pillar to Post Home Inspections. Before starting off the discussion, Geoff shared a few more stats. According to new stats released by the National Association of Home Builders the confidence index is as high as it’s been since 2008. As we had discussed in the summer of 2018, there was a dip in confidence in home builders. It’s now at its highest in 12 years. Housing starts are at the highest level since 2014.
Geoff introduced Dave Willner and began the discussion with:
Do you foresee anything slowing down the 2020 housing market?
The simple answer was “No!” Dave believes that 2020 is going to be a big year. January started off with a big bang. In January 2020 his company reported its highest earnings in three years. The number of inspections are up. They are seeing a niche in the under $500,000 market. Higher-end homes are not moving as quickly as those selling for $500,000 or less.
Geoff agreed that is definitely true for our area. While in some places, such as New York City and certain areas on the West Coast, $500,000 wouldn’t even buy a “fixer-upper.” Dave said that it definitely depends on the market, but that is what they’re finding here. Geoff also agreed that he doesn’t see anything to indicate that 2020 won’t be a big year. However, he does think that there are some interesting things happening economically on a macro scale that everyone should be aware of.
Economics – the Macro and the Micro
How might the coronavirus on the granular level, impact economics? Geoff shared some of the things he’s learned.
In addition to the coronavirus, there is something happening regarding travel. The Boeing 737 Max was grounded last year. That has had a major impact on the airline industry, which further impacts overall travel spending. There is a “double whammy” happening within the travel industry. Further, travel is a significant segment of the U.S. economy; not something to be dismissed. A micro example would be Corning in Upstate New York. A lot of their revenue is received from people traveling from New York City up to Niagara Falls. As it’s a midway point, a lot of international travelers go to the Corning plant to see how glass is manufactured. So many people have traveled there from China that they have tours in Mandarin. Thus, the coronavirus and the Boeing 737 Max have impacted this local economy.
As real estate is local, there could be a locally impacted market while the nation is booming. Those in travel-related economies should keep an eye on these developments. Dave asked if vacation housing in Orange and Sullivan Counties might be affected as a result of these issues. For example, would more people seek a summer retreat? Geoff didn’t think that market would be especially impacted, since much of the tourism in the area is people traveling from other countries. Second homes are more for people in the NYC/metro area who want to get away for a weekend. He doesn’t necessarily see the coronavirus as impacting that end of the travel spectrum. However, the idea is not to be dismissed. It’s an interesting dynamic to keep an eye on.
The Coronavirus and the Impact of Quarantines
Another aspect of the coronavirus is quarantine. China is literally quarantining cities, shutting down transportation, etc. Not only can people not leave their city. They can’t travel. But many also cannot go to work. Stores are being closed, factories shut down and unable to operate. You are now seeing headlines about Apple revising its earnings. They’re saying the supply chain is being affected because much of their manufacturing is done in China. Not only is demand being impacted by the economy in China, which has been affected by the virus. The supply chain is being impacted as well in terms of production. Further, you have to think about commodities. If factories are not running, you don’t need iron, heavy metals. Commodity prices, such as oil, are dropping.
Globally a lot of things are happening now that many people seem to overlook. Right now, things are good in the United States. However, globally many economies have not been doing so well for the last few years. Hopefully the coronavirus will have reached its peak and begin to dissipate.
The Presidential Election
It will be interesting to see what evolves in this election year. There are candidates who are at the opposite economic spectrum of the Trump administration. And if elected, what would the impact be? It would probably not affect 2020 as the election is not till November. However, needless to say, it’s an issue that should not be dismissed.
Trade agreements with Canada and Mexico and China will also impact the economy. Again, it will be interesting to see the impact of global factors.
Keren Gonen joins the conversation
Keren Gonen of Green Team New Jersey Realty joined the panel discussion. Having just arrived from a closing, Geoff filled Keren in on what had been discussed regarding the 2020 market stats. He asked if she agreed with their prediction that 2020 would be a big year. Geoff also talked about inventory pressure and problems. Then he asked what she is seeing now. Keren stated that she’s seeing the same things, and that Spring Market has already started. She’s as busy now as she should be at the end of April. This month alone she has 3 closings. And she’s projecting another 5 closings for next month.
Geoff said that the mild winter might also be a factor. Many people just don’t want to go out and look at homes when it’s raining, snowing, etc. While it has been cold, there has not been a lot of snow to deal with, which helped catapult things. More importantly, interest rates are really low. And that is something that can help offset the high price of homes for some buyers. While the price may be on the high end, it’s what fits the monthly budget that really counts. If that low rate can be locked in buyers can set themselves up for success as home owners.
Wrapping it up
Geoff asked Dave and Keren if they could think of anything that might stop this market from churning as fast as they think it’s going to in 2020. Dave replied it’s about managing the inventory out there. It is definitely a limited-inventory market, and the good deals have been had. Dave has seen a strong influx of people coming up to more rural communities from the city. That’s where many of the buyers are coming from, looking to get out of renter-ship. As long as interest rates stay low, people will continue to buy.
According to Geoff, the Fed is in a holding pattern, neither raising or lowering the federal funds rate that they use to manipulate the economy. It’s interesting that in the last 10-15 years that lever they had, that once meant so much, has little meaning now. Needless to say, it looks like the Fed will hold in place, which just provides more information to consider.
Home Ownership vs. Renting
Keren added that there are plenty of people renting, even in Sussex County, that could actually afford to be home owners. They would pay less for a mortgage than they pay for rent right now. That’s something important to remember. A lot of renters don’t realize they can afford to be homeowners, so they should get in touch with a mortgage broker to see what their options are. In our area, you can pay $800 in a mortgage payment opposed to $1,200 in rent. It’s important to educate people as to what their options are.
Geoff agreed, saying that many people got caught in the downturn of the market 10 or 12 years ago.To them he says, don’t be afraid. Research. Talk to a mortgage professional to see if your income and credit is where it needs to be, and get in the game. Banks who have been renting homes are starting to sell those homes, leaving renters in the lurch. They can’t find other rentals and are in a bad spot. It’s in their best interest to own a home.
Dave remarked that there has been more of a trend for FHA loans. They are no money down essentially. There are lots of options available. Geoff stated that another great thing for this recovery is that you are not seeing a lot of sub-prime lending. That means this recovery is true.
Contact the panelists
Dave Willner, Pillar to Post Home Inspection, 732-647-5231 or email dave.willner@pillartopost
Keren Gonen, Call or text 551-262-4062
