Dear Friends, Clients, and Colleagues:
For those of you living here in Southern California, this weekend felt a lot like the weather we are used to – sunshine, blue skies, and warm breezes. It was a little taste of summer. It also gave us all a shot of hope, that maybe there is a light at the end of the tunnel; I just hope that light isn’t a freight train barreling towards us! That last statement pretty much sums up a lot of the sentiment right now. We are seeing signs of progress through the pandemic, but there is still fear driving many decisions. That fear is understandable as none of us could have predicted the current state of the world (well, I guess Bill Gates warned us back in 2015, but he’s Bill Gates and one of the richest men in the world for a reason).
If you have been following along with me since early March, you know that this is my weekly email newsletter to keep you updated on the local real estate market. But you also know I try to share some positive things with you and hopefully remind us all that despite the challenges, there are still bright lights to take note of. No one can predict the future, but we all have the ability to focus on things that we are grateful for, and take comfort that the world and this country has faced many challenges before and we’ve come out of them stronger. On that same note, I read something this week that pointed out the Roaring 20’s followed WWI and the Spanish Flu. I’d like to think we are moving forward to another round of the roaring twenties, especially with the innovations that will come out of this crisis.
For those that are following along with the real estate market, here’s a summary of weekly activity in the South Bay since the CV19 Lockdown:
- New Listings: 59 (down from 61 last week)
- New Escrows: 45 (up from 44 last week)
- Closed Sales: 45 (up from 44 last week)
- Back-on the Market (fell out of escrow): 10 (down from 18 last week)
- Price Reductions: 29 (down from 31 last week)
- Price Increases: 2 (down from 4 week)
- Listings on hold: 14 (down from 16 last week)
- Cancelled listings: 10 (down from 14 last week)
As we wait for the April numbers to come in (stay tuned for a more in depth look at the year-over-year monthly comparison next week) – we see continued real estate activity despite the challenges. This past week showed some positive results. There were 45 new homes in escrow, 45 closed sales, and the number of homes that fell out of escrow dropped by nearly 50% from the week before. The overall volume is down significantly from a year ago, but once again the market is showing resilience. What is important to note is that buyers are responding well to fairly priced properties, and there are many signs that there is still demand for good homes. Additionally, sales that fell apart early in the shutdown have been put back in escrow, and more homes are going from hold status to active again. Reading the tea leaves tells me there is some underlying optimism about the housing market even in a climate laced with anxiety and fear.
Thank you to those that took the time to complete the survey sent out in last week’s email. We had 16% of readers respond, and I’d like to share some takeaways from the questions. While most respondents do not intend to buy or sell in the next 12 months, we did learn that there are still some short term fears about pricing. However, when looking at housing prices in the long run, there is great optimism among those that responded.
- 55% said they have some fear of contracting CV19 from touring a home
- 37% feel real estate values will decline over the next 12 months
- 73% believe real estate prices will either remain flat or increase in the next 12-24 months
- 82% are confident prices will increase in the next 10 years
What I am reading this week:
“Has House Price Appreciation Reached a Tipping Point” by Mark Fleming, Chief Economist of First American Financial Corp. “While every recession is different, we examined how the three most recent recessions impacted house prices for insight into how house prices may fare in the current environment. With the exception of the 2008-2009 recession, house prices have demonstrated their “downside stickiness,” zero or slow growth, but not much decline.”
This Week’s Book Suggestion
Essentialism: The Disciplined Pursuit of Less by Greg McKeown
I have probably given or recommended this book more than any other book I’ve read in the past 5 years. It came recommended to me by a good friend who had the pleasure of seeing the author speak, and came about after a discussion of me feeling overwhelmed by too many commitments at the time. This book is much like the times we face in our daily lives today – it challenges us to focus on what is really important and let go of the things that really don’t matter in the big picture. In other words, saying “No” is one of the most powerful things we have in our arsenal of words.