Earlier this month, realtor.com announced the release of their initial Housing Recovery Index, a weekly guide showing how the pandemic has impacted the residential real estate market. The index leverages a weighted average of four key components of the housing industry, tracking each of the following:
The index then compares the current status “to the last week of January 2020 market trend, as a baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period. The higher a market’s index value, the higher its recovery and vice versa.”
The graph below charts the index by showing how the real estate market started out strong in early 2020, and then dropped dramatically at the beginning of March when the pandemic paused the economy. It also shows the strength of the recovery since the beginning of May.It’s clear to see that the housing market is showing promising signs of recovery from the deep economic cuts we experienced earlier this spring. As noted by Dean Mon, Chairman of the National Association of Home Builders (NAHB):
“As the nation reopens, housing is well-positioned to lead the economy forward.”
The data today indicates the housing market is already on the way up.
Staying connected to the housing market’s performance over the coming months will be essential, as we continue to evaluate exactly how the housing market is doing in this uncharted time ahead.
Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it.
For the first 6 decades after WWII, the housing sector led the rest of the economy out of each recession. Expect it to do so this time as well.
As the economy begins a recovery later in 2020, we expect housing to play a leading role. Housing enters this recession underbuilt, not overbuilt…Based on demographics and current vacancy rates, the U.S. may have a housing deficit of up to one million units.
“The CoreLogic Home Price Index recorded a quickening of home price gains during the fourth quarter of 2019, helping to boost home equity wealth. The average family with a mortgage had a $7,300 gain in home equity during the past year, and a total of $177,000 in home equity wealth.”
Many buyers are wondering where to find houses for sale in today’s market. It’s a true dilemma. We see an increase in buyer demand, but the supply available for purchase isn’t keeping up.
The number of new housing permits issued prior to the great recession increased for 15 years until 2005 (from 1.12 million in 1990 to a pre-recession peak of 2.16 million in 2005). According to Apartment List,
“From 1990 to 2005, the number of single-family permits issued more than doubled, while the number of multi-family permits grew by 49 percent.”
When the housing market crashed, the number of new homes permitted decreased to its lowest level in 2009 (see below):Since then, supply and demand have been out of balance when it comes to new construction. According to the same report,
“Construction of single-family homes has recovered much more slowly — the number of single-family housing units permitted in 2018 was barely half the number permitted in 2005.”
As the U.S. population increases, there is also an increase in the need for new homes. Today, new construction is not keeping up with the increase in the nation’s population. The report continues:
“The total number of residential housing units permitted in 2018 was roughly the same as the number permitted in 1994, when the country’s population was 20 percent less than it is today.”
Essentially, the dip in home building coupled with the steadily increasing U.S. population means there is now a selling opportunity for homeowners willing to list their current houses.
If you’re considering selling your home to move up, now is a great time to get a positive return on your investment in a market with high demand. Let’s get together to determine the specific options available for you and your family.
SHERRY DICKSON & ASSOCIATES TEAM
July Edition
Ready to own a home? Or, if you're already a proud homeowner, do you want to throw a great cookout? This month's newsletter will help you to do both in Paris plus if you're planning a move, I've got a few helpful tips for that too. Read on and have a great month.
Step 1 – Set the foundation Before starting your home search, there are a lot of things you should think about. The first being your credit because it’s the most important factor in whether you’ll be a homeowner or renting for a little longer than you'd like. Create a budget so that you know how much you can afford to borrow, and pay monthly, for a home. Ensuring your mortgage payment is no more than 30 percent of your monthly income is a good rule of thumb.Step 2 – Decide on what you want Put together a list of items you want: school districts, neighborhoods, and access to highways. Research and choose the types of property features you want in a house. Don't be shy! You can narrow your list later.Step 3 – Contact a real estate agent You'd talk about your real estate needs, and your plans. And, you'd discuss everything from neighborhoods, schools, the mortgage and housing industries, to any other factors that affect your buying decision. Your agent can also help during the loan process.Step 4 – Find your dream house Using your list of must-haves, your agent will show you houses that are a good fit for you. As you tour houses, you should point out what things you like and don't like. Often, buyers amend their list of must-haves, and your agent will trim it down to the houses you'll love.Step 5 – Negotiate the deal It's common to receive a counter offer. You'll be empowered to choose whether or not to take the counter offer, present your counter offer, or refuse the offer.Step 6 – Close the deal Upon finalizing the contract, you'll work with your lender to close the loan. If you've been pre-qualified, this won't be a long process. Then, you'll get a Good Faith Estimate (GFE) detailing closing costs from your lender, and your agent will help you close on your home. Remember that if you or someone you know will house hunt soon, let me know. You can email me at sherrydicksonteam@gmail.com or call me at (903) 361-2733 any time.
SHERRY DICKSON & ASSOCIATES TEAMSHERRY DICKSON TEAM / Harold Carter Realtors (903) 361-2733
Make sure to check out my upcoming open houses.Click here to see my listings. I hope to see you there!
If you’re thinking of relocating, make sure you’ve got your ducks in a row. Here are a few to-dos that are often forgotten when you’re moving: — Have your car serviced if you’re driving. — Pack and label boxes that you’ll open first for each room. Using the kitchen as an example, this box would have dishwashing liquid, baggies, and a couple of pans. — Double check with your insurance company to find out their policies on covering your belongings while you’re traveling to your new place. — Refill any prescriptions a week or two before you leave. — Get referrals from your doctors for new physicians in your new city. — Keep important papers, like contracts, with you in your car. — Remember to remove valuables from your bank safe deposit box. . — Try to avoid stress!
Barbeque season is in full swing. In order to have the perfect cookout, you have to plan ahead and plan for a few surprises. Use these tips and ideas to make your next backyard party one to remember: — Have plenty of trash bags and garbage cans. Label them if you want to keep recyclables separate. — If you’re using a gas grill make sure you have plenty of fuel. Or, if you’re giving it a go on a traditional grill, make sure there’s plenty of coal and lighter fluid to keep you cooking. — Don’t forget the repellent! Have plenty of spray and sunscreen for guests. — Think of details that make things easier or more fun like tablecloth weights, recycle bins, outdoor lights, and games to play. — Have a designated play area and eating area for kids. — Ice and cups are two things that are most likely to run out in the middle of your cookout. Keep triple the amount you think you’ll need on hand. — Assign some smaller duties to family members or a few friends freeing you up for bigger tasks. Use these tips and have a great barbeque party with friends and family this summer.
Give us a call at (903) 361-2733 or send us an email at sherrydicksonteam@gmail.com. We're glad to answer questions — no obligation, of course.
