Covid-19 and Real Estate Update 4/24/2020
I’m being asked what’s happening during Shelter in Place (SIP). Are homes still selling? Are prices holding?
In Santa Clara and San Mateo Counties, those answers are both yes. It’s a case of supply and demand. Supply is extremely low, while housing is still in demand. Homes that are priced well are selling quickly, often before they hit the market, and yes some with multiple offers. Let me share some data with you.
Before Shelter in Place began, we were experiencing a strong spring cycle, with prices rising.
Now, with SIP, we are having the second lowest inventory since the Great Recession. Compared to last March:
Santa Clara County inventory is down 35%
San Mateo County inventory is down 16%
Santa Cruz County inventory is down 18%
In the following graph, orange is the trend of homes coming to market this year, vs the gray line of homes coming to market last year.
As supply drops, but demand remains solid, we see that prices have been rising. According to the MLSListings data, with the number of days necessary to sell the property also speeding up year over year:
Santa Clara County: the median single-family home was $1.4M, and sold in 8 days for 106% of list price
San Mateo County: the median single-family home was $1.77M, sold in 10 days, and also garnered 106% of list price
Santa Cruz County: the median single-family home was $923k, sold in 12 days for 101% of list price
Here’s an example of Santa Clara County cities year over year. First the majority:
Next the minority:
How does the trending of homes sales for this March compare to last year? Year over year homes are still selling. Notice in the graph below, even after Shelter In Place started. Are there fewer homes sold? Sure, because there is less inventory to sell, but notice the weekly trending pattern is the same as last year.
What does that mean for real estate? We are anticipating a strong quarter when the SIP relaxes. We are expecting the real estate industry to pull the economy upwards. Just like some of us are expecting to return to everything from our regularly-scheduled medical & dental appointments to hair cuts, and are missing the services of local restaurants, home services, and child care, there are people who want and need to move.
In real estate terms, this is like an extended holiday break. Traditionally there are fewer sales over the winter holidays. Pent up demand shows up in the early spring market. We are expecting the same when people are able to be mobile again.
With mortgage interest rates staying at historic lows, buyers have more purchasing power for their dollar.
For more information about the market, or trending, please give me a call. I’m happy to pull data for you and your specific situation. I recently sold a property, off-market, using live virtual visits, without risking my clients’ health, or the health of the buyers. If you are thinking of buying or selling property after SIP, now is the time to strategize, so you’re confident and ready when it’s time to take action.