Contract Signings Make a ‘Remarkable’ Move

5203 54th Ct SE Salem, OR 97317
Presented by Hamid Karimi | Offered at $2,350,000 | MLS# 20682329

From Realtor Magazine

Pending home sales continued to increase rapidly for the second consecutive month in June despite the COVID-19 pandemic. Based on the Pending Home Sales Index from the National Association of REALTORS®, an increase was seen in the month-over-month contract signings from each of the four major regions in the U.S. as home buyers rushed out to purchase homes across the country.

NAR’s index shows that contract signings increased by 6.3% compared to a year ago.

NAR’s Chief Economist Lawrence Yun said that the contract activity for home purchases is higher compared to a year ago is quite surprising and remarkable considering that we are all amid a global pandemic. Consumers are taking opportunities from the record-low mortgage rates resulting from the Federal Reserve’s maximum liquidity monetary policy.

NAR’s Pending Home Sales Index jumped 16.6% month over month in June to a reading of 116.1.

See snapshot of housing report below:

Yun also said that the strong bounce-back comes after a longer lockdown in the Northeast region. The South, on the other hand, has consistently outperformed the rest of the country. And these remarkable rebounds equate to exceedingly a higher buyer demand.

Upbeat Forecasts for 2020 and Beyond

Because of the recent turnaround in contract signings, NARs adjusted its overall housing forecast. For 2020, NAR is now projecting existing-home sales to decrease by only 3%, with sales increasing to 5.6 million by Q4. New-home sales are projected to increase by 3% this year.

Yun is auspicious that positive GDP growth of 4% in 2021 will drive, on both existing and new, higher home sales. He forecasts existing-home sales to increase by 7% in 2021 and new-home sales to increase by 16%.

Home prices are also projected to increase by 4% in 2020. Yun predicts prices will moderate in 2021 but still increase by 3% as more supply is expected to hit the market.

Low financing costs are expected to continue to attract home buyers. NAR predicts that mortgage rates will stay at or near 3% over the next 18 months.

Full details on Realtor Magazine


Is the Health Crisis Driving Buyers Out of Urban Areas?

18820 Green Bluff Drive Lake Oswego, OR 97034
Listed by Tony Polito and Jennifer Benelli | Offered at $1,395,000 | MLS# 20229842

From keepingcurrentmatters.com

Coronavirus made consumers reassess the factors that make up the “perfect home”. Locations and layouts of their existing homes were taken into consideration. The appeal of a more congested city life appears to be giving way to either suburban or less congested rural life. The interest with an open floor plan faded as people needed more privacy while working from home.

A recent report from news.com showed that buyers are now leaning heavily for more listings of suburban and rural properties.

Here are the year-over-year percentage increases in views per property type:

  • Urban – 7%
  • Suburban – 13%
  • Rural – 16%

Realtor.com’s Director of Economic Research said that the migration to the suburbs is not a new trend but it became more prominent. After several months of staying home, the urge to have more space, and the probability for more people to work from home are factors contributing to this.

Realtor Magazine also reported that the desire to move is strongest in our city markets.

The pandemic also altered how consumers think about floor plans that is

The pandemic also altered how consumers think about floor plans that is why builders are anticipating changes in how future homes will look like. Zillow explained in a recent press release that:

  • Builders believe as people spend more time at home during the pandemic, buyers are realizing which features of their homes are working and not working.
  • Homebuilders predict open-concept floor plans will be a thing of the past, as people now value more walls, doors, and overall privacy.
  • New construction, which offers the chance to personalize home features, saw its listing page views grow by 73% over last May.

The pandemic is impacting the luxury market too. Realtor.com’s Chief Economist previously reported that stay at home and social distancing orders made ‘extra space’ even more relevant. This leads high-end buyers to find a second home that is within driving distance from their primary residence.

It seems that a percentage of people are preparing to leave many American cities. These moves may be permanent, while others may be temporary. In either case, many consumers are on the move and Real Estate Professionals are always ready to help.

Full article on keepingcurrentmatters.com


The Luxury Market is Bouncing Back

1067 Emigrant Creek Road Ashland, OR 97520
Listed by Alan DeVries | Offered at $4,500,000 | MLS# 103010485

From housingwire.com

With the rising home prices, it seems that luxury homes are bouncing back as homebuyers returned to the market in full force in May.

According to realtor.com’s Luxury Housing Report released on Thursday, the luxury market outpaced the rest of the housing market in both price growth and views.

Luxury home sellers returned to the market with new listings of homes priced above $1 million, dropped by 15.1% year over year in May, compared to 57.8% in April. This means that luxury home new listings were still reduced, but to a lesser degree than the month prior. However, like the rest of the market, low inventory is the biggest challenge for these homebuyers.

Chief Economist, Danielle Hale, says the luxury market is leading the recovery. Stay at home and social distancing orders made ‘extra space’ even more relevant. This leads high-end buyers to find a second home that is within driving distance from their primary residence.

Only 25 of the 94 luxury markets tracked by realtor.com showed listing price growth since January. The pandemic has also slowed price growth in the luxury market, which had increased by 15% at the beginning of the year.

Zillow said new listings of higher-end homes dropped by 46%, while the less expensive homes are reduced by 32%. In response to the pandemic, new listings of the most expensive homes were the first to drop below 2019 levels, while cheaper listings fell over a week later.

According to realtor.com, luxury listing price entry points reached $2.97 million in May despite a small pace of growth. This is up 0.5% from April and 6.1% year over year.

As Hale said, it’s the luxury market that led the housing market’s median price growth, which was up 1.6% in May year over year.

After falling 9.5% year over year in April, searches for million-dollar homes grew 7.3% year over year. This topped the 6.2% growth that we saw before the pandemic slowed things down.

Not only are luxury listings seeing more viewers, but popular second-home markets are seeing the love, too.

Full details on housingwire.com


‘Housing Construction Has Turned A Corner’: Starts, Permits Rise In Latest Data

19349 Outrider Loop, Bend, OR 97702
Listed by The Ladd Group | Offered at $949,000 | MLS# 220102874

From forbes.com

As Covid-19 caused cities and businesses to shut down operations, new home constructions were also put to a pause in the previous months.

Fortunately, those days are almost over as the Census Bureau has released data last June 17th showing that the housing starts have increased by 4.3% in May, with 934,000 new starts recorded for the month. Building permits also rose to 14.4% over April. Single-family permits also jumped by 11.9%.

This bodes well for the supply-strapped housing market but this is not a quick relief. It usually takes about 8 months for a permit to become a housing completion or a finished property ready for sale. This means that buyers won’t see the outcome from the production in May until early next year.

Fannie Mae’s chief economist says the Census Bureau report was weaker than expected but it seems that the housing construction has already turned a corner. Single-family starts should see a stronger June due to the limited housing supply and record-low mortgage rates, which have sent applications to purchase a home rising for the last nine weeks straight.

The rising buyer demand should also inspire builders. A data released by Redfin earlier this week shows that homebuying demand increases by 25% over pre-pandemic levels.

The latest data from the National Association of Home Builders proves as much. Based on their latest survey, builder confidence jumped from 21 points to 58 this week. Anything over 50 indicates general optimism among builders. Their chief economist said that as the nation reopens, the housing is currently well-positioned to lead the economy forward.

Full details on forbes.com


Economists Forecast Recovery to Begin in the Second Half of 2020

800 Terrace Dr, Lake Oswego, OR 97034
Listed by Yvonne Blewett | Offered at $1,559,000 | MLS# 20117172

From keepingcurrentmatters.com

Concerns about the country’s financial standpoint continue to come up daily now that everyone is thinking about the U.S. economy. The top question emerging is -when will the economy begin to recover? No one knows when the economic rebound is likely to happen, but expert economists are becoming aligned on when this will transpire.

Based on Economic Forecasting Survey from the Wall Street Journal, 85.3% believe a recovery will begin in the second half of 2020.

Chris Hyzy who is the Chief Investment Officer for Merrill stated they are fully expecting that the economy could begin to pick up in late June and July, then a strong recovery in Q4 of this year will follow.

Furthermore, five of the major financial institutions are also forecasting positive GDP in the second half of the year. Today, four of the five expect a recovery to begin in Q3 of 2020, and all five agree a recovery should start by Q4.

Leading economists, analysts, and financial institutions are all in agreement that the economic recovery should begin in the second half of 2020.

Full details on keepingcurrentmatters.com


Housing Market Positioned to Bring Back the Economy

Listed by: Jason Mendell
12160 SE Greiner Ln Happy Valley, OR 97086
Listed by Jason Mendell | Offered at $1,700,000 | MLS #19307064

From keepingcurrentmatters.com

Everyone is so focused on the American economy at the moment. As it goes, so does the world economy. With states beginning to reopen, the question becomes: which sectors of the economy will drive its recovery? There seems to be a growing agreement that the housing market is positioned to be that driving force toward the necessary improvement.

Some may question that statement as they look back on the last recession in 2008 when housing was the anchor to the economy – holding it back from sailing forward. But even then, the overall economy did not begin to recover until the real estate market started to regain its strength. This time, the housing market was in great shape when the virus hit.

According to Mark Fleming, Chief Economist of First American, many still live with the effect of the Great Recession. People may be expecting the housing market to follow the same path in response to the coronavirus outbreak. But, distinct differences are showing that the housing market may follow a much different path. The housing market may have led the recession in 2008-2009, it may also manage to bring us out of it this time.

Every piece of sold property has an impressive financial impact on local economies. As the real estate market continues to recover, it will act as a strong tailwind to the overall national economy.

Full article on keepingcurrentmatters.com


U.S. Homeownership Rate Rises to Highest Point in 8 Years

From keepingcurrentmatters.com

Almost everyone has been complying with the stay-at-home orders from our state and local governments for nearly two months now. This unexpected situation has put our daily lives on pause making us find comfort in spending time at home and feel secured from having a much-needed safe place to live.

According to the Housing Vacancy Survey (HVS), Americans place great value in homeownership and it is continuing to grow in the United States. The results provided by the U.S Census Bureau show that the homeownership rate rose to 65.3% for the first quarter of 2020. This is a number that has been rising since 2016 and is the highest rate obtained in eight years.

The National Association of Home Builders (NAHB) explained that a strong owner household formation with around 2.7 million homeowners added in the first quarter has made the increase of the homeownership rate, especially under the decreasing mortgage interest rates and strong new home sales and existing home sales in the first two months before coronavirus hit the economy.

The National Association of Home Builders (NAHB) also highlighted that the homeownership rates among all age groups increased in the first quarter of 2020.

  • Households under 35, who are mostly first-time homebuyers, have registered as the largest gains, with the homeownership rate increased by 1.9% from a year ago.
  • Households with ages between 35-44 have increased by 1.2%.
  • Households with ages between 55-64 have increased by 0.9%.
  • Households with ages between 45-54 have increased by 0.8%.
  • Households with ages over 65 have increased by 0.2%.

Homeownership has always been a great financial investment and an important part of the American Dream. The current situation makes many people feel more thankful for the home they get to share with their families. Coronavirus may be slowing our lives down, but it is showing us the emotional value of homeownership too.

Full article on keepingcurrentmatters.com


Americans are down on stocks after coronavirus sell-off, Gallup survey says real estate is the best investment.

From gallup.com and cnbc.com

Americans feel cynical about stock market investing due to the economic shock caused by coronavirus. 21% of Americans who think stocks or mutual funds are the best long-term investment is down by six points from 2019 and the lowest percentage recorded by Gallup since 2012. Real estate ranked first, followed by gold and savings accounts.

Since 2013, 35% of Americans say real estate is the most recommended long-term investment. And since 2016, over one-third of Americans have named real estate as the top investment.

Stocks and mutual funds remain the second most preferred long-term investment, despite the dip. Savings accounts or CDs (17%) and gold (16%) followed. Bonds lagged at roughly 8%.

Stockowners have also lost interest in stocks or mutual funds — with the percentage naming stocks dropping from 37% in 2019 to 30% now.

The results came from Gallup’s annual Economy and Finance survey that was conducted from April 1–14 among 1,017 U.S. adults.

High-income Americans believe stocks and mutual funds as the best long-term investment. However, the drop occurred among both high-income and low-income Americans, with a decline of nine points each from last year’s survey, while the percentage of middle-income respondents who chose stocks or mutual funds did not change.

The survey shows that the ownership of stocks is stable at 55% of Americans. But confidence among stock owners fell, with only 30% picking stocks and mutual funds as the best investment — down from 37% in 2019. And even after a decade of economic expansion and record stock market gains, the percentage of Americans that own stocks have not reached its 63% peak from before the Great Recession. A low was reached by 52% in 2013.

65% of high-income households said investing $1,000 in the stock market is a good idea, but 47% of middle-income households and 39% of low-income households agreed. Over half of stock owners believe the investment to be valuable, while the sentiment among non-investors hovered closer to a third.

Stocks appeal’ may have faded after the longest-running bull market in the U.S. history ended, they still ranked as the second most valued investment. However, the economic fallout from coronavirus could scramble Americans’ preferences as the stock market is at risk and the real estate market’s future is uncertain.

Full Article on gallup.com and cnbc.com