The economic toll of the shutdowns and unemployment we are seeing is hard to predict. However, experts are reminding us that the economic impact will rebound with a cycle of downturn followed by economic expansion. A recent study from John Burns Consulting also notes that past pandemics have created rebounds that had minimal impact on housing prices and historically over time real estate has out preformed the stock market.
Three leading financial institutions (Goldman Sachs, JP Morgan, and Morgan Stanley) predict a projected decline in our nation’s GDP (as the measure of our country’s economic health) followed by a steep rebound in the second half of 2020.
With this in mind, many business owners are optimistic. Recent surveys indicate that 66% of surveyed business owners feel they will be able to return to regular business within one month, and 90% feel they will be back to normal in less than three months’ time.
It is important to remember This is not 2008. Today’s market conditions are not related to the housing market and overpriced homes and easy-to-access mortgages– we’re not where we were 12 years ago. None of those factors are in play today. Rest assured, housing is not a catalyst that could spiral us back to that time or place. Homes have been appreciating but not inflating, there is low inventory, and interest rates although fluctuating are generally at record lows.
Right before the housing crash of 2008, people were cashing out the equity of their homes at historic rates. This led to a steep increase in foreclosures and short sales, which in turn lowered the value of other homes in the area. That won’t happen today because house prices have risen nicely over the last few years, leading to over 50% of homes in the country having greater than 50% equity with owners who have not been tapping that equity like they did in 2008
The most unconventional aspect of this new age real estate industry is the fact that touring homes has become more difficult, as it should be. Here at Chase International, we have implemented some creative ways to keep prospective buyers ‘touring’ homes; through digital Virtual Tours, Live Virtual Open Houses using Facetime, Facebook Live, and virtual touring with our MLS software.
Prospective buyers will most likely remain hesitant to buy before they can physically tour a home, but the minute that people are allowed to take a physical tour, the market is going to boom.
We are entering what is usually the busiest season of real estate, which typically lasts through the end of the summer. I am confident that the busy season will last through the fall, and possibly extend through the winter.
For people who have been considering selling, it might not be necessary to wait. One benefit of Americans being home all day is that they are online all day long. Momentum is building, so there is no need to fear putting your home on the market now. Many real estate analysts believe that there will be a pent-up demand in the real estate market during the shutdown that will lead to a flood of activity once shelter in place orders are lifted.
This may lead to a flood of new homes on the market and lower prices, but the demand may still be high. Some areas will lose more buyers than others. Real estate agents in the Bay Area are already seeing a surge in activity and interest moving forward from this pandemic so the Tahoe area is posed to have a good summer and even fall real estate season. It is clear that there is still strong interest in North Tahoe and Truckee Real Estate.
Here are the current statistics for the sales of Single Family Homes and Condominiums in North Tahoe and Truckee, excluding Donner Summit, Sierra County & Surrounding Areas as of midday 4/22/20.
- 391 Total listings (Active, Contingent and Pending)
- 325 Active listings Median price $918,000
87 under $600,000
94 between $600,000 and $1,000,000
144 over $1,000,000
- 66 Contingent and Pending Median price $809,500
16 under $600,000
26 between $600,000 and $1,000,000
24 over $1,000,00
- 37 Sold Listings (closed escrows) Median price $639,000
(3 of those were listed in April)
15 under $600,000
15 between $600,000 and $1,000,000
7 over $1,000,000
- 55 New Listings Median price $849,000
18 under $600.000
14 between $600,000 and $1,000,000
23 over $1,000,000
Here are some notable points of interest that indicate a positive change;
- 56% of Active listing and 58% of New listings are priced under $1,000,000. For quite a long time $1,000,000 + properties have been over 50% of our Active listings.
- 64% of listings in escrow and 87% of Sold listings in April are priced under $1,000,000.
- The $600,000 to $1,000,000 and under $600,000 parts of our market are experiencing a close to equal level of activity in both sales and listings.
At Chase International we are implementing innovative, creative, and easy technology to keep us connected with our clients, fellow agents, and our staff and allow us to continue to show property and assists buyers and sellers with their real estate needs.
Several tactics we are implementing:
- Zoom or Google Hangouts Meet for video conferencing
- Virtual home tours using our digital Multiple Listing Service (MLS) platform
- Virtual Open Houses
- Weekly market statistics updates
- Digital document signing and review
Additionally, Chase International has introduced a new method for listing properties for sale called Chase Ready Properties. This program offers more upfront information to the buyer on the property, the ability for a quicker escrow, more assurances for both buyer and seller and less bargaining during an escrow.
Have confidence in the real estate market, because as soon as our world begins to shift back into normalcy, the market will be at its height.
Greg Rankin and Chase International do not guarantee the accuracy of this information. Statistical information gathered from the Tahoe Sierra Multiple Listing Service. Not all real estate transactions in our area go through MLS, therefore, this information may not be completely accurate. CalDRE License #00826938