Wow. The concept of home has never been more prominent or critical than the times we find ourselves in today. In whatever walls you have found yourself surrounded by in the last nine weeks (but hey, who’s counting?), we hope they have brought you comfort and some sense of peace amidst the chaos.
So speaking of chaos…it’s no secret that the Silicon Valley housing market was set-up for a sizzling spring and summer season and off to a SOLID start… and then the shelter-in-place hit. While the rest is history in the making, we do know that recent weeks have brought a surge in purchase applications, as well as signs of buyer interest in Bay Area starter homes, southern California luxury homes and second homes in several regions across the nation. With regards to what else we may expect to see, the National Association of Realtors® has revised their 2020 Housing Market Forecast (read in full HERE). Below you will find a few of the key findings, and some tips on how that may apply to you.
PRICING
The revised forecast asserts that median sales price appreciation will be 1.1% nationwide, formerly forecast at 2-4%.
For You: Homes of Silicon Valley encourages you to look at micro-market trends in your desired purchase areas, as well as Bay Area housing shortage levels as a whole. Several industry sources believe that Silicon Valley will be one of the fastest markets to rebound due to an already critical housing supply and serious buyers ready and waiting. Also, note that local price trends are likely to impact the home you are selling AND buying… so move-up buyers may wish to maximize the low rate environment and the reduced price acceleration.
EXISTING HOME SALES
Sales of existing homes are expected to drop 15% compared to last year. This projection is due to a lack of homes on the market, not because there are homes sitting on the market and not selling (this is not 2008, thank goodness!).
For You: This does not automatically mean it is a ‘bad’ time to sell your home. Fewer homes on the market means less competition. The pent-up demand coupled with even lower inventory is still driving multiple offers in many areas, across many price points in Silicon Valley. In addition, the touring process (no open houses and the Property Entry Advisory & Declaration process) means that the only buyers viewing your home are the serious ones. You may have less foot traffic, but from a much more committed pool of prospects.
RATES
Realtor.com predicts that mortgage rates will average 3.2% throughout the year, dipping down to 2.9% by year-end.
For You: This is where the rubber meets the road – if you know where you want to live long-term, 2020 will be the year to make it a reality. Purchasing power will be way up while home prices rise slower than we have seen in years. The Realtor.com forecast expects home sales to pick-up in late summer and fall, right as the lowest of the low rates are arriving. Waiting too long may mean a whole lot more competition and not a whole lot more inventory, so keep that search active for the long haul – starting now. (I know a guy who can help…;) ).
Last But Not Least
There are some new reports that getting a mortgage is harder because of the current economic environment and employment concerns. Not all borrowers may be impacted, but every borrower should have their lending pe-approval updated. Many lenders are tightening guidelines to adjust for the likelihood of forbearance, which means that credit scores, down payment amounts and sources and employment verification will be under a microscope.
As always, Homes of Silicon valley is committed to helping you decide if and when a move is right for you, with no obligation. Deciding when to buy, sell and invest is not always easy – but we like to think it can always be educational… and fun too!
This dynamic market is also an ideal time to seek out as much support as possible, so if you need help finding a trusted lender, home improvement professional or other resource – please do not hesitate to ask.
Sending health, happiness & hope,
Mark Barber, Homes of Silicon Valley