Market Update October 2020

The market is as hot now as it was in the housing boom of 2006

With housing being so similar today as it was in 2006 right before the crash, many homeowners are worried about the market right here in Kent county crashing like it did in 2008. The good news right now is that Foreclosures and short sales according to the National Association of Realtors represent less than 1% of the sales in August.

We totally understand your concerns, back when the market crashed there was an average of about a 75% decrease in home prices. Many homeowners lost their homes to a short sale or even worse foreclosure. Including us, it was a horrible time. So the question that many people are wondering is, “Is that going to happen again?” Honestly, as experienced as we are in Real Estate, we just don’t know. However, what we can do is look at the facts.

One thing we all can be certain about is that there isn’t much to be certain about. We’re not trying to be a pessimist, but it’s also very important to be as much of a realist as possible. We cannot truly foresee what the housing market will do. One thing we are seeing and are certain of is that there are a lot of people still losing their jobs and we are still seeing many restaurants and small businesses close down, and much of that is on a local level, so it’s scary.

We also don’t know how long this pandemic is going to last and what the impact will be on the economy as a whole or on the housing market. But here are a few things we do know right now. Just as quickly as there is a new social media site that takes over, or just as quickly as technology changes, our viewpoint may also change before this video even gets out. But as of right now, what we are seeing locally in Grand Rapids and the surrounding areas is that homes are selling very quickly.

The lower the price of the home, the more offers, and competition we are seeing. Recently we saw 22 offers on a property that was listed. That means 21 buyers did not get their homes. For buyers, getting an offer accepted at $200,000-$249,000 is very competitive because inventory is so low which makes it definitely a seller’s market.

In our professional opinion, there are several reasons for this. One, a lot of sellers were holding off earlier in the year due to the uncertainty of what’s happening in our world. Two, interest being at nearly record lows allows more buyers to enter the market, and three we are in an election year which is just right around the corner, historically housing tends to stay good during these times.

So in the past when sellers have come to ask if it’s a good idea to sell now, with the Holidays’ around the corner. It’s always been said if they can wait to list, it was probably better and to try to list their home right after the holidays. To shoot to have it ready to be active on the market in mid-January. So in previous years, we would have recommended waiting. However, that is NOT what we’re recommending now.

We think now is an opportune time to sell given the low-interest rates, dramatically low level of inventory on the market, and high buyer demand. Also, with the unlikeliness that home prices in this area will go up much more than they already have and the uncertainty of what lies ahead, we think it is an opportune time to sell.

According to Lawrence Yun, the National Association of Realtors chief economist, he says and I quote “Shortages of homes for sale have proven problematic in the housing industry over the last few years, but have grown even worse in recent months. Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,”

We agree and believe that now is an opportune time to sell…Now that’s just our professional opinion and we don’t have a crystal ball. So we will stay on top of all the current market trends and keep you up to date each month in our market report. Hope that helps everyone and please reach out to us if you have any further questions or need any additional help.

As always, make it a great home selling and buying day. And remember A&J Realty Partners are always here to serve you!