Victoria’s View — August 2020
Focusing on What We Know
As we enter the final stretch of summer, we are also entering a new phase of unknown. At the start of the pandemic, August felt far off — many thought things would be “normal” by this time. While some normalcy has returned, many questions remained unanswered. The largest topic on the mind of many is the return of school. New York’s Governor has announced that NYC schools have the green light to open. Will this trigger a return to the city for many that left in the spring? Many questions about the logistics of schools remain to be seen.
Schools re-opening is just one of the unknowns. We are still faced with questions such as when will a vaccine arrive? How will the election in impact markets? There are many questions to answer, but there are also many that have been answered. During times of uncertainty, focusing on what is known and sticking to goals is important.
As it relates to the real estate market, we focus on the following known trends and themes:
Data is King — Regardless of industry, data is king. Companies are constantly looking for more data as well as way to understanding their existing data. At Compass, we access to myriad real-time
market stats that guide our pricing recommendations to ensure you are set up for success. We recently unveiled a state-of-the-art
Competitive Market Analysis tool that we can send fully digitally.
Virtual is Here to Stay — A change that was likely coming in the future that the pandemic forced us to adapt quickly, virtual working and engagement. It is efficient and effective.
Interest Rates are Historically Low — Rates have dropped to never before seen levels. For Buyers it is a must to take advantage of these rates. Prior to writing this, the 30-year fixed dropped below 3% for the first time ever. Rates will likely remain low in the short to medium term, but rates will worsen at some point in the future so do not take them for granted.
Active Buyers are Serious — For Sellers, they must note that Active Buyers are more serious than ever more. They are motivated to make a transaction because of low mortgage rates as well as a concrete understanding of what they want in their next home thanks to spending so much time in their existing home recently.
Avoid Wait and See Mentality — This is true for both Buyers and Sellers. In times of uncertainty it can be compelling to “wait it out”, however, may times than not this mentality can lead to inefficient results towards your goals. It is nearly impossible to time the market. For Buyers, focus on quality and the best deal that matches your defined criteria list. For Sellers, focus on why you need to sell and remember, selling at a lower market means you are also buying your next home at a lower price.
With all that in mind, we leave you with 5 trends we’ve noticed that illustrate the real estate bounce back that has been underway since Shelter In Place has been lifted.
- Mortgage Rates continue to hit record lows and Buyers are taking advantage. 30 year mortgage rates dipped below 3% to the lowest level in history
- New Mortgage Applications are up 33% from July 2019
- Nationally, existing home sales in June rebounded 20.7% month over month. This represents the highest monthly increase ever recorded
- Median home prices increased for 100 consecutive months
- Homebuilder sentiment is currently at 72. The last time a yearly average was this high was in 1999
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