Amid COVID-19’s current economic instability, 2020 is proving to be a fascinating time for the housing sector and its impact on developments in the real estate industry. As these trends have developed and continue to evolve, it is important to consider the latest trends in the real estate market and also to look back over time to help with forecasting and making sense of the future. The housing market looked good in February, but when public health officials sounded the alarms about the coronavirus, more buyers and sellers started taking a “wait and see” approach.
Going into 2020, real estate investors were worried about how the housing market will do in the coming year. These concerns were fueled by changes in the monetary policy of the Federal Reserve, a decrease in the stock market, a surplus of available jobs, low unemployment rates at all times, insufficient affordable housing to accommodate an enormous millennial population, and high consumer debt.
Going into 2020, real estate investors were worried about how the housing market will do in the coming year. These concerns were fueled by changes in the monetary policy of the Federal Reserve, a decrease in the stock market, a surplus of available jobs, low unemployment rates at all times, insufficient affordable housing to accommodate an enormous millennial population, and high consumer debt.
Here are the Facts happening in the 2020 Real Estate Sector that you need to know!
Home Prices are Yet Growing Slowly
Compared to last year, home prices rose by a teeny-tiny 0.6 percent by April 2020, down from the almost 4 percent growth rates in March. This slower pattern in growth is possibly due to coronavirus craziness and market volatility. But home prices pushed their way back to a growth rate of 3 percent during the third week of May almost to pre-COVID levels. So there is a chance that home prices might be recovering again.
Mortgage interest rates are exceptionally low
Well before the pandemic, mortgage interest rates were going down. The average interest rate for a conventional 15-year fixed-rate mortgage (the cheapest type of mortgage and the only type we suggest) fell to 2.69 percent in May, the lowest in more than seven years. Historically low mortgage rates are just another game-changer for 2020. One of the major driving factors getting customers back into the market is today’s low cost. On several occasions this year the average rate has hit an all-time low, and it continues to hover in the record-low territory. When prices are so poor, consumers have a great opportunity to get more for their money while buying a house, which many are willing to discover while wanting to spend more time at home this year, and potentially beyond.
Major Job Losses in the Market
12 million people have lost their jobs since February. Unemployment rates from May to June are down (2.2 percent), but 11.1 percent of Americans are still without jobs. On the work front, it is not all bad news. Jobs rose in almost all sectors (except government and mining). Notice that housing markets cannot be lumped together. Markets in every city are different and vary even from neighborhood to neighborhood. For example, in some markets located in some of the states most affected by COVID-19, new home sales are up; San Jose and San Francisco, as does Las Vegas. While the economy is suffering, home sales do not inherently mean that they are.
Low Inventory and High Demand Prices Push Home
In June, inventories for sale dropped by more than 18 percent compared to June 2019. The national median price of existing homes sold in June was $295,300, a rise of 3.5 percent compared with 2019. In June, new home sales continued to rise, but not enough inventory to satisfy the demand. Supply was very poor, and the demand is proliferating each day. We know this formula is pushing house prices up. There will be 22 percent less in housing starts in 2020. Our population is increasing, at the same time. Millennial’s, now the largest group in the U.S. form households and look to purchase homes.
Strategies for Coping with the Real Estate Market
Work as a Team
Not only are the team agents working for you, but they also include your favorite title firms, your favorite lenders, your photographers, and your home inspectors. They’re your reflection. Hence, work as a team rather than a working individual. Take everyone’s opinion while taking decisions and come up with various strategies that can hit the market.
Send Monthly Strategic News Letter
This is one of the best and most reliable ways of remaining in front of the field and prospects. Build authentic Real Estate Email List and reach your target prospects looking for your services. Visuals and strategic formatting make your Real Estate E-Zine (Strategic Digital Newsletter) highly successful for your real estate lead generation and referrals. Ensure that useful home tips are provided, buyer’s real estate ideas, and seller advice. In building ties in your newsletter, be proactive so that you can see who is involved and what they click on. For buyers and vendors, you should always have something. If you see someone clicking on a link it’s a good flag they can soon sell or purchase.
Own Real Estate Website
Real Estate Website Provider enables people with your MLS to search for houses, save favorites, receive updates to their favorite properties, and notifications every 15 minutes. If there is a contract with the house, let them know. Also, they have a built-in CRM and the ability to submit customized hot sheets from your website.
Personalized Follow-Up
If the value has been given, provide a follow-up plan that goes beyond just one text. Call your customers to check-in and inquire about the value they have got. Write personal notes and give them in gratitude for their company and referrals. By following up on tailored approaches, you’re going the extra mile to invest in relationships that will sustain your company.
System for Tracking
Leaving space in your marketing strategy for monitoring is important.
If you ignore monitoring results, you’ll never know what works!
Invest in a real estate CRM that will keep your database and record your activities in the lead-generation. Check-in weekly and monthly to see how many leads and referrals you have created, and find out what you need to do to move on with further success.
Fascinating facts in Real Estate
- The US housing market stands at $33.6 trillion
- 67.9% of Americans own a home
- 50% of buyers find their new home online
- Staged homes sell 25% faster than non-staged ones
- By 2020, millennial’s will account for 45% of mortgages on the market
In those markets, one challenge that consumers will face is inventory constraints. Consider the number of new homes for sale in April declined by 45 percent year-over-year. Sellers will continue to hold on to listing their homes given the challenges of pricing.
And if buyers can find a home they might not be able to obtain a loan. Hypothecary prices are expected to fall below three per cent to a historic average. For consumers, that’s typically good news. The truth of today is that lenders are becoming increasingly stricter on qualifications requirements. The balance of 2020 appears to be on the rocky side for the country’s real estate market analysis in these turbulent times.
