Sunny weather, the smell of BBQ on the grill, the sound of kids outside playing in the pool, more businesses being allowed to open up and serve our community, and of course the return of a hot real estate market!

Earlier this week I released some simple local real estate stats for the month of April – it’s a year over year comparison for existing single-family home sales in the cities of Fresno and Clovis. Check it out below –

Take a look at the first line, Average Sold Price is up almost $30,000! The Average Days on Market (how quick on average a home stays on the market before going under contract) is down by 10 days. So what’s going on here… it’s a supply/demand issue. With interest rates under 3.5%, it makes sense that there would be a lot of buyers looking to purchase a home right now (yes we are showing homes right now, we can do it virtual or with a private appointment). And while a buyer may pay a bit more for the home itself than a year ago, they are now able to escape high rent apartments and housing and build their own equity. Sellers are enjoying all the competition from buyers wanting to be the next owners of their homes. If you are thinking of selling your home, I kid you not, this is the time! We are putting more homes safely on the market each week using 3D tours and private showings with buyers that are required to wear masks and gloves. Text me if you have any questions on the market today 559-708-8768 – I’m here to help.

The COVID-19 crisis is causing different challenges across the country than the ones we faced in 2008. Back then, we had a housing crisis; Today, we face a health crisis.

COVID-19 has left us with a lot of unanswered questions and with the economic slowdown we’re experiencing across the country today, many are asking if the housing market is in trouble. For those of you that remember 2008, I get why you would ask.

Most all of us in one way or the other experienced financial hardships, some lost homes, and some their jobs – it was truly a great recession – a recession that started with a housing and mortgage crisis.  Today, we face a very different kind of challenge: Today we face a health crisis that has caused a pause in much of the economy and a major shutdown of almost every part of our country. 

Here are five things we know about today’s house market that differ from 2008.

1. Appreciation

When we look at appreciation in the visual above, there’s a big difference between the 6 years prior to the housing crash and the most recent 6 year period of time. Leading up to the crash, we had much higher appreciation in this country than we see today. In fact, the highest level of appreciation most recently is below the lowest level we saw leading up to the crash. Prices have been rising, but not at the rate they were back then.

2. Mortgage Credit

The mortgage credit availability index (that’s a mouthful) is a monthly measure by the mortgage bankers association that gauges the level of difficulty to secure a loan. The higher the index, the easier it is to get a loan; The lower the index, the harder. Today we’re nowhere near the levels seen before the housing crash when it was very easy to get approved for a mortgage. After the crash, however, lending standards tightened and have remained that way today. In fact, many lenders have raised their minimum credit score requirement to 700 or above.

3. Number of Homes For Sale

One of the causes of the housing crash in 2008 was an oversupply of homes for sale. Today, as shown in the image, we see a much different picture. We don’t have enough homes on the market for the number of people who want to buy them. Across the country, we have less than 6 months of inventory, an under-supply of homes available for interested buyers. 

4. Use of Home Equity

Look at the difference in how people are accessing the equity in their homes today as compared to 2008. In 2008, consumers were harvesting equity from their homes and using it to finance their lifestyles. Today consumers are treating the equity in their homes much more cautiously (ag good thing). 

5. Home Equity Today

Today, 53.8% of homes across the country have at least 50% equity. In 2008, homeowners walked away when they owed more than what their homes were worth. With the equity homeowners have now, they’re much less likely to walk away from their homes. 

The Last Word: 

The COVID-19 crisis is causing different challenges across the country than the ones we faced in 2008. Back then, we had a housing crisis; Today, we face a health crisis. What we know now is that housing is in a much stronger position today than it was in 2008.  It is no longer the center of the economic slowdown. Rather, it could be just what helps pull us out of the downturn.