There has been a “supply problem” for quite a while and now there is a “demand problem” both at the same time. What does this mean?
A low supply is now confronted with low demand. Many people believe we will find ourselves in another recession and values will drop. Not so fast, it all boils down to supply and demand. Because of COVID-19 and the “stay at home” order the economy has come to a complete halt and has been thrown into an instant recession; better described as a “pandession”. So many people gravitate to the last recession; when housing took a giant hit, and values in OC dropped 30%.
In March of 2007, the subprime lending industry collapsed. Demand instantly dropped to levels that were much like today. Yet, there were over four times the number of homes on the market compared to today. With very low demand and a huge supply of homes, home values drastically declined with the presence of risky loans in the system.
This is NOT where housing is today. There are less buyers looking which has caused a reduction in demand combined with a low supply of homes on the market. The showdown between both supply and demand are two countering forces that is moving the market to become more balanced; a market that does not favor buyers or sellers and as a result, values do not change much at all. Low demand pushes the market in the buyer’s favor; however, the low supply pushes it in the seller’s favor.
Buyers tripping over each other is no longer the norm but that does not mean that buyers are going to get “a deal.” This is NOT the recession of 2007 – that was a buyer’s market fueled by an oversupply of homes built on risky loans. The market is moving towards a Balanced Market and not a Buyer’s Market.
If you need to buy or sell, don't let the current environment detour you. I am still successfully assisting my clients during this time opening and closing escrows. Give me a call to help you come up with a plan specific to your needs, whether it be now or when shelter in place is lifted. Stay safe and take care of one another!
How Sweet is your Lemonade?
I’m not sure about you but when life gives me lemons, I make lemonade. The current situation of social distancing from those I love has not been easy and I wish things were back to “normal” just like most of you. One thing I do know, we have the ability to take away something great from all of this. We are reminded it’s the little things that matter most; greeting a stranger with a smile and hello, an increase of family activities, surprise delivery of goodies to a friend, time to pick up the phone to say you care or the realization that a virtual birthday is just as special as long as you share it with those you love. In times like these, it is important to reflect as to what matters most and what your definition is of a successful life is. As for me, I truly have it all and as a result, when “normal” returns I make a promise to not let the “old normal” take over the “new normal." Stay well!
Mortgage rates drop to 30-year low! A great time to refinance.
Last week, mortgage rates dropped to 3.45% - the lowest level ever in the history of the Mortgage Bankers Association’s (MBA) 30-year-old weekly survey resulting in a great time to refinance. Call (714.883.4953) or email me so I can connect you with a mortgage lender.