As we know by now, the housing market is still moving big time. Here in Santa Fe, it’s running. Racing actually. Working with buyers to secure a home has been quite the workout. Whether that be rushing to see a home its first day on the market or writing competitive offers that beat the ten other offers coming in, it’s been a wild ride as a buyer broker in Santa Fe. In fact, on a national level the recovery of the housing market is essentially forming a V-shape as it is now exceeding pre-pandemic numbers.
However, although we have people lining up to buy a home, we have a serious inventory situation. According to Realtor.com, since the beginning of the pandemic back in March, nearly 400,000 fewer homes have been listed compared to last year, which leaves an incredibly large hole in the U.S. housing inventory. They have concluded that as a result, home prices are accelerating at double last year’s pace.
Keeping people safe, of course, is a top priority right now and the National Association of Realtors (NAR) as well as the New Mexico Real Estate Commission have adapted the process for buying or selling a home to accommodate new health orders. Matterport 3D virtual tours have been crucial for out-of-state buyers who are now able to virtually tour a home and see direct renderings of floor plans through this new platform. Zoom meetings/consultations, and live stream open houses is another way real estate practice has pivoted. If a showing is done in-person, face masks, gloves, and sanitary wipes are utilized and signing certain COVID forms are required for COVID tracking purposes. Real Estate has been up there with some of the fastest sectors to quickly pivot for a new adjusted way of commerce.
HOT SHEET - RESULTS AND PAST PERFORMANCES
4 Reasons Why the Election Won’t Dampen the
Tomorrow, Americans will decide our President for the next four years. That decision will have a major impact on many aspects of life in this country, but the residential real estate market will not be one of them.
Analysts will try to measure the impact feasible changes in regulations might have on housing, the effect of a possible first-time buyer program, and any number of other situations based on who wins. The housing market, however, will remain strong for four reasons:
1. Demand Is Strong among Millennials
The nation’s largest generation began entering the housing market last year as they reached the age to marry and have children – two key drivers of homeownership. As the Wall Street Journal recently reported:
“Millennials, long viewed as perennial home renters who were reluctant or unable to buy, are now emerging as a driving force in the U.S. housing market’s recent recovery.”
2. Mortgage Rates Are Historically Low
All-time-low interest rates are also driving demand across all generations. Strong demand created by this rate drop has countered other economic disruptions (e.g., pandemic, recession, record unemployment).
In addition, Freddie Mac just forecasted mortgage rates to remain low through next year:
“One of the main drivers of the strong housing recovery is historically low mortgage interest rates…Given weakness in the broader economy, the Federal Reserve’s signal that its policy rate will remain low until inflation picks up, and no signs of inflation, we forecast mortgage rates to remain flat over the next year. From the third quarter of 2020 through the end of 2021, we forecast mortgage rates to remain unchanged at 3%.”
3. Prices Continue to Appreciate
The continued lack of supply of existing homes for sale coupled with the surge in buyer demand has experts forecast strong price appreciation over the next twelve months.
4. History Says So
Though it’s true that the market slows slightly in November when it’s a Presidential election year, the pace returns quickly. Here’s an explanation as to why from the Home Industry Report by BTIG:
“This may indicate that potential homebuyers may become more cautious in the face of national election uncertainty. This caution is temporary, and ultimately results in deferred sales, as the economy, jobs, interest rates and consumer confidence all have far more meaningful roles in the home purchase decision than a Presidential election result in the months that follow.”
Ali Wolf, Chief Economist for Meyers Research, also notes:
“History suggests that the slowdown is largely concentrated in the month of November. In fact, the year after a presidential election is the best of the four-year cycle. This suggests that demand for new housing is not lost because of election uncertainty, rather it gets pushed out to the following year as long as the economy stays on track.”
There’s no doubt this is one of the most contentious presidential elections in our nation’s history. The outcome will have a major impact on many sectors of the economy. However, as Matthew Speakman, an economist at Zillow, explained last week:
“While the path of the overall economy is likely to be most directly dictated by coronavirus-related and political developments in the coming months, recent trends suggest that the housing market – which has basically withstood every pandemic-related challenge to this point – will continue its strong momentum in the months to come.”
Santa Fe Community Outreach
Support the local Farmers’ Market at the Railyard every Saturday, Sunday, and Tuesday morning! Support local Farmers and source fresh fruits, vegetables, meats, and other perishables. Also, use your EBT card at the service desk for twice the dollar-equivalent chips.
Now, more than ever, it’s so important for us to reach out and help our community and Santa Fe Lifestyle Properties wants to be there on the front lines of support. For every closed transaction Santa Fe Lifestyle Properties will donate $500 to one of the following funds. All funds can be viewed at Santa Fe Community Foundation website.
-COVID-19 Response Fund
-Empty Pantry Fund
-Early Childhood COVID-19
-Emergency Response Fund
-Native American Advised Fund
-All Together NM Fund