Getting Ready For Summer

A Note from Mary

Despite the COVID-19 pandemic, it is still a great time to sell a home in our area. Our housing market was very active before the economic shutdown and even with some unemployment, many buyers still have their job and are motivated to buy a home and take advantage of the very low interest rates. There are several factors that are creating low inventory - (1) many senior homeowners who were planning on moving to a retirement community have decided to stay in their home for now; (2) some sellers who were thinking of selling have decided to keep their home and remodel; and (3) some new construction projects were halted. 

The record-low inventory and high buyer demand has created a bidding war with multiple offers on most listings. If you are thinking of making a move, let's schedule a strategy call to discuss your opportunities in today's market.

Take care and stay safe and healthy!

Mary

REAL ESTATE MARKET ON TRACK FOR A STRONG SUMMER

The Coronavirus pandemic created an economic free-fall experienced across the country this spring, causing a lot of uncertainties in the real estate market. At a time when the real estate is gearing up for its hottest season of the year, the country was experiencing record unemployment claims. Some sellers cancelled their listings, but many opted to wait to list their homes until things settled down. The good news is as stay at home orders are being lifted across the nation and we are finding our new normal and the real estate market is showing a lot of promise for a strong resurgence this summer.

Summer Will Pick Up Spring's Slack

Experts predict that the summer will be hotter than usual as it picks up some of traffic that the spring season would have seen. Chief Economist Danielle Hale, from Realtor.com, told Yahoo Finance, "There are a lot of indicators showing that the summer is going to be a good period for the housing market.

I think we're going to see some of the buying that would have happened in the spring shift into the summer." Housing prices and mortgage applications support these predictions.

Mortgage Applications

Heading into the month of March, mortgage rates were starting to rise, making a promise for a spring market with a lot of pent up demand as buyers tried to lock in rates before seeing any additional increases. However, as the pandemic set in, mortgage rates dropped to a 30 year low. This, in combination with Americans who are ready to resume life despite the pandemic, has caused a surge in mortgage applications. Data from the Weekly Mortgage Applications Survey conducted by the Mortgage Bankers Association shows that mortgage applications have increased in the beginning of June by 13% higher than June of 2019.

Housing Prices

Throughout the pandemic, housing values have shown resiliency. Rising home values coupled with historically low rates and lower available inventory indicate an active and busy summer real estate market. Here's a look at how some of our local markets are shaping up:

The median home value in the Bellevue zip code of 98006 decreased by 3% over the year prior, but May values increased by an astounding 12% year over year.  

The median home value on Mercer Island decreased by 10% over the year prior, but May median values increased $200K over April's values, alleviating the year over year gap and an reducing it to 3%.  

During an unprecedented time, it is reassuring the see the real estate market recovering in this strong of a manner. If you were planning to make a move in real estate this year, the summer is looking to be a great season to do it.

ECONOMISTS FORECAST RECOVERY TO BEGIN IN THE SECOND HALF OF 2020

With the U.S. economy on everyone's minds right now, questions about the country's financial outlook continue to come up daily. The one that seems to keep rising to the top is: when will the economy begin to recover? While no one knows exactly how a rebound will play out, expert economists around the country are becoming more aligned on when the recovery will begin.

According to the latest Wall Street Journal Economic Forecasting Survey, which polls more than 60 economists on a monthly basis, 85.3% believe a recovery will begin in the second half of 2020.

There seems to be a growing consensus among these experts that the second half of this year will be the start of a turnaround in this country. Chris Hyzy, Chief Investment Officer for Merrill notes:

"We fully expect the economy could begin to pick up in late June and July with a strong recovery in the fourth quarter."

In addition, 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 the third quarter of 2020, and all five agree a recovery should start by the fourth quarter.

Bottom Line

The vast majority of economists, analysts, and financial institutions are in unison, indicating an economic recovery should begin in the second half of 2020. Agreement among these leading experts is stronger than ever.

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