Am I Getting Market Value For My Home Today?

Strong emphasis on “today”! The Coronavirus Pandemic has impacted the real estate market in more ways than one here in North Carolina.

2020 showings in North Carolina were tracking steadily along the same path as 2019 showings. Then on 11 March, showings took a nose dive and today, 5 April, showings are down 74% since 11 March.

According to Durham’s Stay At Home Order (click here), real estate services are considered non-essential – aside from appraisal and title services. In-person showings and open houses are prohibited. Other surrounding counties may be allowing in-person showings but Durham appears to be more restrictive.

Nevertheless, real estate transactions are still taking place. Upon entering my office this morning and checking the activity that occurred over the last day, I see 36 new listings came on the market and 24 homes sold. In full disclosure, this is activity that had occurred in Durham County as well as these counties: Alamance, Orange, Person, Granville, Wake, and Chatham.

For sellers that are putting their house on the market today and receiving / accepting offers, are they getting market value? Market value is an opinion of a home’s value partly defined by its exposure to a competitive market for a reasonable time prior to sale.

Since the number of showings are down so significantly, how competitive is the buying market when, in some cases, buyers cannot take in-person tours of homes and instead, must rely on videos and agent walkthroughs. Undoubtedly, most buyers would not put an offer on a home unless they were able to see it in-person. Less showings and fewer offers makes for a much less competitive market. Therefore, it can be argued that less competition means lower prices.

Many sellers are waiting until the market returns to some form of normality. On the other hand, sellers that are entering the market today are the highly motivated sellers – those that may HAVE to sell their home. That pressure alone may force that seller to take the first offer or any offer for that matter, further reducing the likelihood of receiving market value as the home may not have been on the market for a reasonable time prior to the sale.

Bottom Line

If you are one of those sellers that HAVE to sell their home during this pandemic, one way to ensure you’ll receive market value for your home is to hire an agent that will conduct an in-depth comparative market analysis and explain the numbers to you.

Photo credit: amycgx on VisualHunt / CC BY-NC

Don’t Let Frightening Headlines Scare You

There’s a lot of anxiety right now regarding the coronavirus pandemic. The health situation must be addressed quickly, and many are concerned about the impact on the economy as well.

Amidst all this anxiety, anyone with a megaphone – from the mainstream media to a lone blogger – has realized that bad news sells. Unfortunately, we will continue to see a rash of horrifying headlines over the next few months. Let’s make sure we aren’t paralyzed by a headline before we get the full story.

When it comes to the health issue, you should look to the Centers for Disease Control and Prevention (CDC) or the World Health Organization (WHO) for the most reliable information.

Finding reliable resources with information on the economic impact of the virus is more difficult. For this reason, it’s important to shed some light on the situation. There are already alarmist headlines starting to appear. Here are two such examples surfacing this week.

1. Goldman Sachs Forecasts the Largest Drop in GDP in Almost 100 Years

It sounds like Armageddon. Though the headline is true, it doesn’t reflect the full essence of the Goldman Sachs forecast. The projection is actually that we’ll have a tough first half of the year, but the economy will bounce back nicely in the second half; GDP will be up 12% in the third quarter and up another 10% in the fourth.

This aligns with research from John Burns Consulting involving pandemics, the economy, and home values. They concluded:

“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.”

The economy will suffer for the next few months, but then it will recover. That’s certainly not Armageddon.

2. Fed President Predicts 30% Unemployment!

That statement was made by James Bullard, President of the Federal Reserve Bank of St. Louis. What Bullard actually said was it “could” reach 30%. But let’s look at what else he said in the same Bloomberg News interview:

“This is a planned, organized partial shutdown of the U.S. economy in the second quarter,” Bullard said. “The overall goal is to keep everyone, households and businesses, whole” with government support.

According to Bloomberg, he also went on to say:

“I would see the third quarter as a transitional quarter” with the fourth quarter and first quarter next year as “quite robust” as Americans make up for lost spending. “Those quarters might be boom quarters,” he said.

Again, Bullard agrees we will have a tough first half and rebound quickly.

Bottom Line

There’s a lot of misinformation out there. If you want the best advice on what’s happening in the current housing market, let’s talk today.