We hope you and your family are safe and healthy during this extended shelter in place! Here's a compilation of data we've experienced and seen within the industry to keep you up to date on our current market:
- Banks are tightening lending guidelines, requiring more down payment (20-25% minimums), more reserves to purchase and higher FICO scores for JUMBO loans.
- Banks are also limiting/halting applications for home equity lines of credit, affecting liquidity of equity for homeowners.
- San Mateo County's aggressive appreciation has started to show signs of slowing down. This is for two reasons:
- Covid-19 is directly affecting people's decisions. This is more likely buyer reluctance than direct financial capability at this point in time.
- Listing agents are pricing closer to value than they have in the past. In the last 9 years of appreciation, agents were in the habit of pricing properties below and sometimes significantly below market value
- Days on market is the lowest in the last 12 months, however is deceiving consumers. The MLS has frozen days on market for current and new listings. They do not count down. However, on public portals such as Redfin and Zillow, they will have 'On [website] days' which should give a different indication to consumers.
- New and available inventory is consistent with recent, past months, however homes are selling at a much slower rate. As shared earlier, this is likely influenced more by consumer confidence (or lack of it) than anything else at this point in time.
- Sales volume across the board sharply fell and is at 12 month low. This is expected with shelter in place and limitations of showings and what is deemed essential.
- Months of Inventory has spiked to a 12 month high. We cannot formally say we are in a shifted market until we can see a 2-3 month trend of increased inventory. Our market averages 2 months or less of inventory versus in the month of April, we have exceeded 3.5 months of inventory.
- Interest rates continue to trend lower and mortgage applications to buy a home improve. The average contract interest rate for a 30 year fixed rate mortgage decreased to 3.43 compared to 3.45% from last week. Mortgage companies also see an increase of 12% from the previous week.
Top 4 Predictions
- Residential real estate will lead the economic rebound and is always a major economic driver. We've had more time than ever to think about what homes mean. Home is where we feel safe and people are willing to invest in their safety.
- Buyers' priorities will shift from urban to suburban neighborhoods. Trending features will be multiple home offices or areas, in-law suites and private yards.
- Market demand will continue to outpace inventory. Buyers who still have job security who have saved their down payment, are ready to purchase with less restrictions to be out of shelter.
- Virtual education experience will change the school and education landscape. This will have an affect on housing with more teens and young adults staying at home to 'go-to school'. Students during this generation will also have less student debt.
Have questions or comments about our current or future market? Reach out to us below!: