It’s the beginning of a new month and some states across the country are re-opening. Broad Stay-Home orders are lifted here-and-there and some businesses are getting back to… business. Though nothing will seem normal for quite some time.
Masks will be a daily part of every outfit. You won’t be met with personal contact upon a greeting. We’ll all be spaced apart. Nothing will seem busy. Things will look and feel different.
The Housing Landscape
There are a few things we’re already expecting and seeing when it comes to Real Estate here in Tennessee. First off, home prices are maintaining, especially in Grassland.
I know a lot of Buyers have been speculating for years *and hoping* that we will see another “bubble pop” like we did in the 2007/2008 recession. But I’ve written in previous blog posts (seen here) about the low likelihood of that happening again, mostly because we headed into this Covid crisis with low housing inventory. There are more Buyers out there than there are homes For Sale, which was not the case in the early 2000’s.
“There’s no way we get through this unscathed. But I don’t think the world will fall apart in the housing market the way it did in the last recession,” says Realtor.com®’s chief economist, Danielle Hale. “We won’t see prices driven down out of necessity because people are forced to sell like before.”
In the early 2000’s, we had really loose lending practices, which led to more foreclosures, which contributed to an oversupply of homes (more homes for sale than Buyers). This caused home prices to plummet. Today is a very different picture. And Sellers seem to be reflecting that by standing firm on their prices.
NAR Chief Economist Lawrence Yun says, “The housing market faced an inventory shortage before the pandemic.” Given that there are even fewer listings during the pandemic, there are still more Buyers than Sellers right now. So it is still a Seller’s market.
A Possible Leveling Off
It’s very likely that the extent of price changes we’ll see in our Real Estate market could reflect more of a leveling-off rather than a dip. Instead of continuing our growth in pricing, we may see our home values stay put for a bit. Though so many people are without jobs, the majority of Americans are still employed and mortgage interest rates remain at record lows.
And even if there is a dip in pricing, it likely won’t be as large or as long-lived. Major financial institutions believe a strong rebound for employment (and therefore housing) is in the cards with a V-Shaped recovery looking something like this chart created by Real Estate information distributor KeepingCurrentMatters.
Institutions like Goldman Sachs, JP Morgan, Morgan Stanley and Wells Fargo are all predicting a much shorter recovery period than some of our country’s past economic crises like the Great Recession and the Great Depression.
“This [crisis] is short-term,” says NAR’s Lawrence Yun. “We will come out of this.”
A Rebound Already
What’s the well-known slogan for the Marines?
“Improvise, Adapt, and Overcome”.
These principles have already played out in our Real Estate market, which is part of the reason there’s so much optimism for our long-term outlook here.
3D tours, more pictures and videos are now combined with virtual showings to keep our market moving these past few weeks. It’s an adaptation due to necessity because people need a place to live. Especially during a pandemic.
A showing service used widely by Realtors here in Middle Tennessee, called ShowingTime, has recently unveiled an option for virtual showings. And likely because of this adaptation, we’re already seeing a huge increase in home showings which helps Buyers more efficiently decide where or not to buy the home.
Looking at this ShowingTime chart, reflecting the impact of showings due to Covid-19, you can see our showing requests in Tennessee dropped almost immediately beginning March 12th. We saw our deepest dip in showings exactly a month later, on April 12th, at about 38% below the first week in January, though the beginning of April is normally close to our highest.
Today, as we look at the past few weeks with the unveiling of virtual showings, we’re on an upward trend –up to 2% above where we were the first week in January, though still trailing by about 23% from where we usually are during this time of year.
In a Forbes magazine interview with ShowingTime Chief Analytics Officer Daniil Cherkasskiy, they note this data can be reflective of further movement in our market. Cherkasskiy says, “Showings typically track 30-45 days ahead of sales data so closed sales could follow a similar pattern.”
Ride the Wave
I’m hopeful that as StayHome orders are lifted, we’ll continue to see a rapid increase in showings and therefore closings, though our Grassland closings are still holding strong. (An update on this in my next post.)
“People need a place to live, and at some point we’re going to get past the virus,” says Robert Dietz, chief economist of the National Association of Home Builders.
I hope we someday get past those itchy masks as well.
If you need to sell your home and want honest advice on what it takes during these unprecedented times, I’ve got you. Call, email or text me. I provide a free consultation to see what your home could sell for – or to get pre-approved to buy. ALL DONE VIRTUALLY! I’m a Grassland area resident, I’m a Platinum Award-winning Williamson County REALTOR® ranking in the top 2% and I specialize in helping my neighbors buy and sell homes!