Market Update October 2020

Market Update October 2020

Market Update October 2020

Friends and clients-

The real estate market is making up for lost time, but things might change soon.

1 – A surge in sales and record prices

This spring, home sales slowed to a crawl due to the coronavirus pandemic. However, this summer, the market has come roaring back. Sales of existing homes surged 24.7% in July compared to June (the last months for which we have full data). That’s the biggest gain in sales since the National Association of Realtors started tracking these numbers in 1968.

Home prices are also rising. The median home price reached a record high this July, both in absolute terms and also when adjusted for inflation. When adjusted for inflation, current median home prices are 3.4% higher than the previous record set during the housing bubble in 2006. 

2 – Never-before seen mortgage rates

One thing that’s contributing to both sales and price growth are record-low mortgage rates. The average 30-year mortgage rate dropped to 2.88% a few weeks ago. That’s a number that would have been unimaginable just a year ago, but these days, rates as low as1.99% have been spotted in the wild. This is making homes more affordable to buyers, and it’s increasing demand even more than the lockdown may have. However, things might be changing.

3 – Clouds on the horizon

This August, nearly a third of renters were unable to pay rent. Likewise, a growing number of homeowners are falling behind on mortgage payments. These are lingering effects of the economic lockdown surfacing now because unemployment benefits and various mortgage forbearance programs are coming to an end. That’s why experts predict a rise in defaults and evictions, which is likely to wash over the entire market in the coming weeks and months.

A severe lack of homes for sale means you could sell in record time, and since low mortgage rates are making homes more affordable, you could get top dollar for your home.

3 – Clouds on the horizon

This August, nearly a third of renters were unable to pay rent. Likewise, a growing number of homeowners are falling behind on mortgage payments. These are lingering effects of the economic lockdown surfacing now because unemployment benefits and various mortgage forbearance programs are coming to an end. That’s why experts predict a rise in defaults and evictions, which is likely to wash over the entire market in the coming weeks and months. 

What does this mean for you? Well, If you have been thinking of selling, now might be a golden moment. A severe lack of homes for sale means you could sell in record time, and since low mortgage rates are making homes more affordable, you could get top dollar for your home. However, the dark clouds I mentioned above could change things quickly. We could see an influx of new homes for sale on the market this fall, which would drive down prices and put us into a buyer’s market, with many homes sitting for months while buyers pick and choose among them. 

That’s why it makes sense to act now if you’ve been thinking of selling. If you’d like to get started, you can get an idea of what your home is currently worth with this home value calculator, which is based on recent Grand Rapids area sales: 

Enter your address here to find out what your home is currently worth

If you are ready to get the process rolling, give me a call at 616-942-2449. I’ve helped several sellers over the past month, and we’ve sold quickly and at top price. So if you have questions, give me a call and I will answer them, so you can make the best choice for your circumstances. 

Have a great day, 

Kevin

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