I have incredible news about the real estate market!
Q: “Jeremy, after COVID-19, riots, and some murder hornets, how’s the real estate market?”
A: Our answer might shock you! It shocked us at The Larkin Group, and we do this every day!
Every single thing about 2020 could, and perhaps should have, indicated that a major real estate market correction was coming. And then it didn’t. So what gives?
I’ve gone through and organically compiled the market data all the way back to the first week of January to see where things were headed, where they derailed with COVID-19, and where they SHOULD have gone thereafter.
We tracked new homes hitting the market, price reductions, closings, and pending sales (see the spreadsheet in the video above).
**During the week of May 3 through May 9, we closed on 126 homes in Washington County and 174 homes went under contract. This is exactly what we would expect from a non-pandemic market. **
COVID-19 hit in March, and quarantine measures were strong during those weeks but began to fade in April. The data show that pending sales fell from 145 in the first week to just 99 in the last week of March. But in April, pending sales increased by 22% in the second week and by 4% in the first week of May.
How is this possible? There are quite a few factors, actually, but here are a couple of key ones:
- There was pent-up demand during COVID-19, given that fewer people were buying and selling during the worst of the pandemic.
- Mortgage interest rates are low. As in borrowing money to buy a home is REALLY inexpensive! How much so?
- In the 1970s, mortgage interest rates averaged around 8.86%;
- in the ‘80s, they averaged 12.7%;
- in the ‘90s, it was 8.12%;
- in the ‘00s, it was 6.29%;
- in the ‘10s, it was 4.07;
- and today, interest rates hover around 3.24%. Homes today are literally MORE affordable than they were in the ‘70s and ‘80s, despite massive increases in home values since then.
The last thing I want to share with you is something I broached about six weeks ago: There are a lot of folks who are living in major metropolitan areas who are just plain ready to get outta dodge.
A piece in USA Today discussed how folks who live in large cities are considering moving to smaller areas because they don’t want to be stuck in another pandemic. That was BEFORE folks started rioting and looting their cities….
The great news is that the St. George real estate market is alive and well, and conditions are strong for both buying and selling. If you have any questions about making a move, reach out to us. We would love to answer your questions.