As COVID-19’s impact spread across the country in March, the stock market declines started in February accelerated downward before recovering a bit in the last week of the month of March. With volatility across all the financial markets, lenders began tightening underwriting standards and some buyers found they no longer were approved for a loan. These have been turbulent times for many of us across North Alabama.
I decided to put together a first Quarter market report for 2020, as well as add in a detailed weekly report of the effects we are seeing locally on the Real Estate market since the introduction of Covid-19.
For the week of April 4th more than 6.6 million workers had filed for unemployment benefits according to the latest report by the Labor Department, on top of the 3.3 million that had filed for unemployment the week prior. High levels of unemployment are expected to continue in the coming weeks as businesses are required to remain closed and shelter in place orders have been put in place for Alabama, and expanded across the country until at least May 1, 2020.
The impact of these orders is becoming more apparent as we watch the trends and effects on our local Real Estate market.
Let’s jump right in!
In jumping right to our north Alabama Real Estate market, we need to see what is happening to our inventory of available homes, especially with the increase in businesses that have opened and moved to our North Alabama region. We saw an increase 6.6%% in Single family homes coming onto the market in March of this year, compared to 2019. As we compare our Q1 (first quarter) market numbers for Single family residential homes that entered the market, we also saw an increase of nearly 12% when reviewing where we stood this year compared to Q1 2019.
Our number of homes that went under contract (pending) also increased in March 2020 by +20.8% from 2019, and by +20.3% for the entire first quarter review.
Interestingly enough our days on market have also continued to decline. Showing that though times are concerning, due to the lack of available inventory, (though better than last year) our homes are still being purchased up quickly. Showing we still have more buyers looking for homes, than the available inventory needed. In March 2020 we saw a decrease compared to March of 2019 by -26.5%, at 50 DOM (days on market). For the Q1 2020 DOM we have decreased by -22.1% averaging 53 DOM, compared to 68 DOM in 2019.
Our average Sales price is still on the incline, ever so cautiously. When reviewing our entire Q1 we increased from $215,435 in 2019, to $232,616 in 2010 Q1, showing an 8% increase is a nice gain for our local residents.
On our closed sales reports for North Alabama Single family homes, we had a 13.4% increase in Q1-2020 over Q1-2019.
Now since times have become concerning and I have received many questions regarding where could our Real Estate market economy be headed with Covid-19, and these Stay-at-home orders, even though Real Estate businesses are still considered an essential business?
Is it remaining stable, or are we headed into a recession? Will our homes go down in value? Are homes still selling during this time?
These are all great questions, and questions that all of us at Amanda Howard Sotheby’s International have been asking as well.
I felt it best that we start tracking our numbers on a weekly basis so we can see in real-time the effects of Covid-19 on our North Alabama marketplace.
Now keep in mind, this is as of April 13th data, and we will continue to watch these trends, however much can change based on the length of time this Stay at home order is in place. At the time of me writing this Market Report blog, the order is scheduled to be lifted May 1st, 2020.
In watching first the number of homes coming onto the market on a weekly basis for our Single Family homes only, and comparing this over last year’s numbers, we can see that there was an obvious concern when the stock market took a hit. However life continued on after a couple weeks. The next dip was again after the schools closed in North Alabama. After a week of settling in to this new normal, we had an increase again.
Data for the Week Ending…
Our next question is are home still selling, AND are they still holding their value?
|Data for the week ending…||Single Family homes going Under Contract||Year-Over-Year change|
|3-Month Avg.||307||+ 17.3%|
For our percentage of listing price received. (This states how strong our homes are retaining their value.) This percentage is found when dividing a property’s sales price by its most recent list price, then taking the average for all properties sold in a given month, not accounting for seller concessions. We have seen a really nice trend of our homes holding values. We are up from 2018 when we were receiving on average 97% of home values, and 2018 we were receiving 98% on average for the year. So 2020 is already retaining 98.3% for our 1stQ of prices recieved.
|Data for the month of…||Single Family Value received||Year over Year Change|
As far as our weekly showings March 16th when we were watching with concern our showings for our market area starting at 400 showings, peaking mid-week at 500, and then dipping just below 400 at the school closure. The remained low in the mid 300’s the following week as we saw families adjust. By March 27th we saw a surge back up rather quickly that week to 500 showings again. Our lowest showing week was surrounding the Stay at home order. Understandably, there was fear, and concern. Showings dropped to the low 200’s April 4-6th. We at Amanda Howard Sotheby’s International Realty had clear guidelines and standards in place for our agents AND our customers to be able to continue with business in a safe manner that was in alignment with CDC guidelines. Once that information was able to be shared and understood, (and while seeing a significant jump to our online virtual tour and 3D tour activity on our websites and youtube), we did see our lockboxes accessed up to the peak of 390 April 9th,and then lower as we prepared for Easter weekend.
Whether you’re looking at the Housing Bubble (Great Recession) of 2008 or looking back nearly 100 years ago to the 1930’s after the Great Depression, Real estate returns exceeded stocks with significantly less volatility. In fact, since the 1970’s real estate has beat the stock market nearly 2:1
As you can see from this report, the North Alabama Real Estate market is still moving strong. Though week by week we see a lot of change as we navigate this together, this appears that we are still set to see a prime-time season starting in May. We do expect to see a surge of homes coming onto the market, and are encouraging anyone who was planning to sell this Spring and put things on pause until the quarantine is over, to please go ahead and reach out to our agents now.
We have safety guidelines in place and can tour your home virtually at your convenience and let you know what you may need to do to get your home prepared for the market. It is better to get started now, rather than wait when there may be a mad-rush and your home will inevitably be delayed in the processing of multiple families all at one time and with limited photographers, stagers, and time. Interest rates are still at historic lows, and is a great time to take advantage of those when looking to purchase.
Stay safe, and stay healthy. We are excited to have our restaurants and local businesses back up and running May 1st. And we can’t wait to be able to hug our friends again. In the meantime, if you need anything Real Estate related, don’t hesitate to reach out to us. We are focused on delivering the highest quality of Virtual Real Estate services to you and your family to help you move forward with life even during this unprecedented time.
Simply email or visit our website, and we remain available for phone calls, and multiple facetime conference abilities.