What is happening to our economy? What’s happening in Real Estate?
I know it’s a scary time and with all the negative news, but I feel it’s important to look at what the Experts are saying and base our decisions on that information.
One question we always get is ”What’s happening in the real estate market?” Also, “how’s is our economy and should we even be thinking about buying or selling a home in San Diego County and more specifically La Mesa, and East San Diego County.
To understand that better, let’s take a look at what’s happening on a National level.
According to Sam Khater, Chief Economist of Freddie Mac:
”Although the uncertainty of the crisis means forecasts of economic activity are more unclear than usual, we expect that most of the economic damage from the virus will be contained to the first half of the year. Going forward we should see a recovery starting the 2nd half of 2020.”
Locally we are still seeing buyers out in full force and inventory is very low right now. We are having multiple offers on most of our properties, and they are still moving very quickly.
Obviously, there are a lot of unknowns in the economy right now and that can add to our anxiety and stress, but if we look at what we DO know, that can help us make more accurate decisions about buying or selling a home in San Diego County.
For starters, we know we started the year stronger than ever, however, due to our current crisis, we are in a high unemployment rate right now, and we know that the Fed is doing what they can to help.
The good news is that we are in a record low interest rate environment, which leads more people to want to buy because they have more purchasing power.
Also, more good news, is that equity amongst homeowners is strong. According to John Burns Consulting, 42.1 forty two point 1 percent of homeowners own their home free and clear, meaning there is no mortgage on their homes.
16.6% sixteen point six percent of Americans have between 60 and 99% equity in their homes, and only 7.3% seven point three percent of Americans have less than 10% equity in their homes.
This is very different than back in 2008 when many people were basically using their homes as an ATM machine. Thankfully most homeowners seemed to have learned their lesson, and 58.7% fifty-eight point seven percent of all Americans have at least 60% equity in their home. And that will help offset a housing crisis. This is good news!
Also, we have seen an up-tic on rents since 1988 and they are still continuing to rise. This too promotes home purchases as renters begin to realize they don’t get the tax advantages and other benefits of homeownership.
In the first few months of the year, “Showing Rates” which tracks the showing traffic of homes for sale, continued to increase until around the week of March 8th, when showings took a huge dive, as many areas had shelter in place restrictions and were not allowed to show homes.
However, since the middle of April, we are seeing Showing Rates significantly increase as the shelter in place restrictions are being lifted.
So buyers are still out there and it isn’t all doom and gloom. Please feel free to reach out to us anytime here at One World Realty to ask questions or if you just need some advice in regards to buying or selling your East San Diego County home.