I hope this update finds everyone well. It seems like most friends and clients that I talk with are beginning to accept and settle into the pandemic norm at this point. I know for my family, getting back into our fall routines of work, school, and kid activities has helped.
When real estate and the whole economy went on pause at the end of March, it was hard to know how the market would look in months to come; I actually wondered if I would sell another house in all of 2020. A couple months in, I started hearing from so many of my clients about house projects and/or thoughts of taking their current equity and buying something with more space. Many of you need another home office, a bigger playroom/classroom, more yard, maybe one with a pool, etc.
With everyone “stuck” in their homes and really no true end in sight, but more an understanding that we would ease back into the office, school, community recreation, and the like, I started to realize we were going to be very busy.
Here is what is actually going on:
1. Unhappy Homeowners – Realtor.org surveyed homeowners last month and reported that 44% of homeowners are dissatisfied with their home right now. Sound familiar?
2. Lots of Equity – Homeowners have equity in their homes. Here in Charlotte if you bought 3-5 years ago, you may have over six figures of equity in your home, equaling the down payment on the next house!
3. Historically Low Rates – Of course you have heard rates are at an all-time low. If you aren’t buying a new house, then you’re refinancing. Lenders are swamped and most are unable to close in 30 days right how. Mortgage activity is 30% higher than one year ago.
4. No Inventory – Inventory has been an issue for years. It is currently down 20% year over year nationally. We need builders to start more homes. Period.
5. Rising Prices – The latest monthly data shows a rise of more than 10% on home prices; that is too fast and we are having appraisal issues as a result.
6. Pending Contracts – Homes under contract are at a record high.
The pandemic has changed so much for so many of us. The home has always been so important, but it is more important than ever as we are spending so much more time in it. With contracts at a record high, things are certain to look bright heading into the winter. There are still too many multiple offer situations, telling us many buyers are still out there. However, the prices are rising too quickly. Affordability will become even more of a constraint for first-time home buyers than before; if prices keep rising, it could actually squeeze first-time buyers out of the market. We need more supply to match the demand, which will allow home pricing to rise more congruent with wages.
Housing is the shining light of the economy right now and I am so grateful to all of our clients for your business, repeat business, referrals, and support. GW Real Estate is at a record year.
Stay well – Genevieve