NextHome’s CEO James Dwiggins and Chief Strategy Officer Keith Robinson break down one of the biggest concerns on Americans’ minds right now – what’s going to happen to home values?
The real answer is “it’s too soon to tell” with real specificity.
But there are some real learnings we can get from taking a closer look at past recessions and how home values were impacted then. The two of them will also share their (many) thoughts on how the pandemic-led economic situation we’re in will compare and contrast, and dive into why this isn’t like 2008.
The biggest thing to take from this is that we are having a ‘Health Crisis’, Not a ‘Housing Crisis’!
A number of factors to take into consideration – the current mortgage rates remain some of the lowest rates in history!
Overall, the US new home construction starts & applications have declined in March from the previous month by the highest number since 1984.
This, along with an overall fall in new listings coming on the market, leads to the inventory levels remaining low.
Although we are seeing a temporary fall in demand, with this low supply of homes, and low mortgage rates, the potential for home values to remain unaffected, or even to see an increase, is high!
Want to find out what is happening to home values in your neighborhood, contact us!
Orlando’s housing market in March saw its home sales improve by nearly 2% compared to March 2019, while the median price increased by 8%.
Inventory experienced a year-over-year decline of 10%, which was to be expected with the Stay at Home order put in place during the month.
However, we will have to wait until the April update before seeing the effects of the COVID-19 pandemic on Orlando’s home sales statistics!
The image below shows the Market Data for the Orlando & surrounding areas
from February 2018 thru March 2020.
The Following graph shows New Listings, New Contracts on Listings, Total Pendings, and Closed Sales over the last two years!
The following shows the cyclical pattern of New Listings over the last 3 years!
This picture shows the chart for New Listings as a better comparison to last year. You will see that the number of New Listings are less than the number last year & for 2018.
However, the number of new listings did increase over last year!
The following shows the total number of homes listed for sale over the last 3 years! Total inventory, although has increased from last month, has fallen further over last year.
The following graph shows the comparison over the past two years better. You will see that total inventory is less than March of the previous two years!
The following shows the Average Monthly Mortgage Rate over the last 3 years!
This past month has seen the rates bounce up & down almost daily, however the average rate has stayed level from last month!
This chart shows more clearly how low the mortgage rates are currently, compared to the last two years!
The following shows the total number of listings under contract (pending a sale) over the last 3 years.
This chart shows the Pending Contracts compared to the previous two years better, and this is the first sign of a potential reduction in sales!
You will see that during both 2018, and 2019 the number of pending contracts continued to increase each month from January through April.
Numbers for March did fall over last month’s!
We are just over 3 weeks into the Stay at Home order in Orange County, and have seen the first signs of a slowdown in transactions.
We will continue to watch the data and present the facts here; please remember that you can find a lot of information (and opinions) online but it is always best to look at the facts!
Obviously with the need to practice social distancing, prospective buyers may not have as many opportunities to view homes in person. This could slow home sales, but with the ultra-low mortgage rates and the supply of homes remaining at historic lows, the signs are that the median price of homes may not be hit as some had been predicting!