Everywhere I go, people want to talk about real estate, and no even more so as the world is dealing with the Corona virus pandemic. Whether you think it is overblown or not, it has affected behavior, and that can lead to an impact on markets, as we have seen lately in the stock markets, bonds, and price of oil, gold and silver. The best way to fight fear is with facts my mentor Brian Buffini, real estate coach and speaker/teacher, say.
So, how will the Corona virus outbreak affect housing? There is no absolute, 100% certain answer. Instead, it all boils down how long this crisis will last and how large of an impact it will have on United States soil and the rest of the world. In China, the number of new cases is dwindling, a glimpse of hope that this too will end. Currently, the data does not indicate any change in the local housing market. The supply of homes to purchase in Orange County is at its lowest level for a start to March since 2013, and demand (last 30-days of pending sales) is at its highest level since 2016. With not enough supply and strong demand, the Expected Market Time (the time between pounding in the FOR-SALE sign and opening escrow) is at 48 days, a HOT Seller’s Market and its lowest level since 2013.
As a direct result from the COVID-19 outbreak, mortgage rates have dropped to a record low and will most likely drop even further. There is a chance that they break below 3% and into the 2’s. This inevitably will provoke many more to purchase, juicing demand. For a $750,000 mortgage, today’s 3.25% rate amounts to a $492 per month savings compared to March 2019’s 4.4% rate. That’s a savings of $5,904 per year. If rates drop to 3%, it’s a $594 per months savings, or $7,128 per year. And, at 2.75%, it’s a savings of $694 per month, or $8,328 per year. In doing the math, it is easy to see how lower rates will stimulate demand. The impact on affordability is astounding.
If you are considering a purchase or in need of selling your home, it is essential to, now more then ever, work with a professional that has your best interests at heart! Mike Rains- Professional Realtor
I love real estate and working by referral. I would like the opportunity to earn your referrals and build a long-term relationship with you. Call me with your real estate questions at (714) 293-4786 or use my contact form in order to get the process of buying or selling your home started.
Mike Rains, Realtor
Huntington Beach, Orange County, CA