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Keys to Selling Your Home Virtually

In a recent survey by realtor.com, people thinking about selling their homes indicated they’re generally willing to allow their agent and some potential buyers inside if done under the right conditions. They’re less comfortable, however, hosting an open house. This is understandable, given the health concerns associated with social contact these days. The question is, if you need to sell your house now, what virtual practices should you use to make sure you, your family, and potential buyers stay safe in the process?

In today’s rapidly changing market, it’s more important than ever to make sure you have a digital game plan and an effective online marketing strategy when selling your house. One of the ways your agent can help with this is to make sure your listing photos and virtual tours stand out from the crowd, truly giving buyers a detailed and thorough view of your home.

So, if you’re ready to move forward, virtual practices may help you win big when you’re ready to sell. While abiding by state and local regulations is a top priority, a real estate agent can help make your sale happen. Agents know exactly what today’s buyers need, and how to put the necessary digital steps in place. For example, according to the same survey, when asked to select what technology would be most helpful when deciding on a new home, here’s what today’s homebuyers said, in order of preference:

  • Virtual tour of the home
  • Accurate and detailed listing information
  • Detailed neighborhood information
  • High-quality listing photos
  • Agent-led video chat

After leveraging technology, if you have serious buyers who still want to see your house in person, keep in mind that according to the National Association of Realtors (NAR), there are ways to proceed safely. Here are a few of the guidelines, understanding that the top priority should always be to obey state and local restrictions first:

  • Limit in-person activity
  • Require guests to wash their hands or use an alcohol-based sanitizer
  • Remove shoes or cover with booties
  • Follow CDC guidance on social distancing and wearing face coverings

Getting comfortable with your agent – a true trusted advisor – taking these steps under the new safety standards might be your best plan. This is especially important if you’re in a position where you need to sell your house sooner rather than later.

Nate Johnson, CMO at realtor.com ® notes:

“As real estate agents and consumers seek out ways to safely complete these transactions, we believe that technology will become an even more imperative part of how we search for, buy and sell homes moving forward.”

It sounds like some of these new practices might be here to stay.

Bottom Line

In a new era of life, things are shifting quickly, and virtual strategies for sellers may be a great option. Opening your doors up to digital approaches may be game-changing when it comes to selling your house. Let’s connect so you have a trusted real estate professional to help you safely and effectively navigate through all that’s new when it comes to making your next move.

Is This Going To Be Like 2008?

Many consumers have on their minds what happened in 2008; that what’s happening today will follow the same trajectory as what happened in 2008. However, when we look at today in comparison to 2008, we start to see a little bit of a different picture. Economist, Dave Rosenberg says,

“What 9/11 has in common with what is happening today is that this shock has also generated fear, angst and anxiety among the general public. People avoided crowds then as they believed another terrorist attack was coming and are acting the same today to avoid getting sick. The same parts of the economy are under pressure — airlines, leisure, hospitality, restaurants, entertainment — consumer discretionary services in general.”

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So, when we take the same approach to the Dotcom and 9/11 crash, we see a different picture from what happened in 2008 with the housing and mortgage crash. We see the S&P correction during that time of about 45 percent but during the same time in 2000, 2001, and 2002, we actually see home price appreciation, which is very different from what happen in 2008. We have to remember, the 2008 crash was caused by the meltdown of the housing and mortgage market, which is not the case today.

So how does the home price appreciation compare between now and then. Well when we look back to the six years leading up to the housing crash, we know we had high appreciation but we are no where near those levels of appreciation today. While prices are rising, what we don’t have is runaway appreciation.

We should also look at the Mortgage Credit Availability (how easy it is to get a loan). Let’s look at the data used by the Mortgage Bankers Association, which measured this date on a monthly basis. The larger the number the easier it is to get a loan. So what we see on the left side of the below graph is that loans were easier to get at the time of the housing bubble. Today there are tighter guidelines making it harder to get a loan.

We have to remember as well, that people were using their homes as ATM’s pre-bubble taking equity out of their homes, putting it into depreciating assets, buying vacations, going on trips, financing lifestyles and thinking this is never going to end. The three years leading up to the 2008 crash there was $824 billion dollars cashed out of homes as refinances. Not so today… the three years leading up to today that number is but a third of this at $232 billion, a fraction of what it was back then.

We also know that 53.8 percent of all the homes in this country have at least 50 percent equity. We know that because 37 percent of the homes are owned free and clear, and when you take the remaining homes, 26.7 percent of those have at least 50 percent equity.

Next, let’s talk about inventory. Entering this year, the biggest challenge we were prepared for in the housing industry was inventory, literally not enough homes on the market for the number of people that wanted to buy a home. So, if we take a balanced market of six months and we look back to 2007, we know there were just over eight months of supply of inventory on the market leading us to a buyer’s market. Today, we’re at 3.1 months of inventory on the market. We literally don’t have an oversupply of homes on the market for people that want to buy them… a much different scenario from 2008.

Last but not least, let’s look at how much income is needed to purchase a home. What we know pre-bubble is that number was a lot higher than what it is today. Buyers in 2006 needed 25% of their income to purchase a home, while today it is just under 15%.

So what we know today entering into this year is that the strength of the housing market is well positioned to help bring us out of this economic crisis. Sure it isn’t going to happen overnight, but the real estate market is positioned for a strong market come third and fourth quarter of this year.

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When is the Economy Going to Recover?

When is the Economy Going to Recover?

There are so many questions these days and one that many keep asking is what’s going to happen to our economy moving forward with this pandemic. Currently everything is on pause, including the economy. In looking at the forecasts from the major financial institutes, Goldman Sachs, JP Morgan and Morgan Stanley, they all agree we are in for a wild ride over the next 90 days (the second quarter of this year) but that we’re also in for a wild ride up through the rest of the year (see graph below). 

Not only do the major financial institutes agree we are going to have a V-Type recovery but Burns Consulting has actually done an analysis on pandemics.  Here is what they had to say, “Historical analysis showed us that pandemics are usually V-shaped, (sharp recessions that recover quickly enough to provide little damage to home prices), and some very cutting-edge search engine analysis by our Information Management team showed the current slowdown is playing out similarly thus far.

Additionally, some of the people who were thinking about selling or buying a house are just delayed… they have been put on pause as well and they are going to come out when this thing ends on the other side.  It is predicted that come July, August, September not only will there be the normal sellers and buyers, but also the delayed sellers and buyers from this quarter. So when they hit that play button again, the real estate market will be ready to go.

With over 90% of Americans now under a shelter-in-place order, many experts are warning that the American economy is heading toward a recession, if it’s not in one already. What does that mean to the residential real estate market?

So what is a recession? 

According to the National Bureau of Economic Research:

“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”

COVID-19 hit the pause button on the American economy in the middle of March. Goldman Sachs, JP Morgan, and Morgan Stanley are all calling for a deep dive in the economy in the second quarter of this year. Though we may not yet be in a recession by the technical definition of the word today, most believe history will show we were in one from April to June.

Does that mean we’re headed for another housing crash?

Many fear a recession will mean a repeat of the housing crash that occurred during the Great Recession of 2006-2008. The past, however, shows us that most recessions do not adversely impact home values. Doug Brien, CEO of Mynd Property Management, explains:

“With the exception of two recessions, the Great Recession from 2007-2009, & the Gulf War recession from 1990-1991, no other recessions have impacted the U.S. housing market, according to Freddie Mac Home Price Index data collected from 1975 to 2018.”

Recession? Yes. Housing Crash? No. | MyKCM

CoreLogic, in a second study of the last five recessions, found the same. Here’s a graph of their findings:

What are the experts saying this time?

This is what three economic leaders are saying about the housing connection to this recession:

Robert Dietz, Chief Economist with NAHB

“The housing sector enters this recession underbuilt rather than overbuilt…That means as the economy rebounds – which it will at some stage – housing is set to help lead the way out.”

Ali Wolf, Chief Economist with Meyers Research

“Last time housing led the recession…This time it’s poised to bring us out. This is the Great Recession for leisure, hospitality, trade and transportation in that this recession will feel as bad as the Great Recession did to housing.”

John Burns, founder of John Burns Consulting, also revealed that his firm’s research concluded that recessions caused by a pandemic usually do not significantly impact home values:

“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices).”

Bottom Line

If we’re not in a recession yet, we’re about to be in one. This time, however, housing will be the sector that leads the economic recovery.

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Is This Going To Be Like 2008?