Today, the Thunderbirds Will Fly Over Austin!
TODAY, the National Association of REALTORS, NAR, held their 2020 legislative meetings, with a Zoom slide presentation by the national chief economist, Dr Lawrence Yun. Believe it or not, March/April looked pretty bad on the news. But Dr Yun makes some very important points.
- While many sectors in the economy were down (jobs in leisure and hospitality were 1/3 of the jobs lost), followed by education, health, and retail, he pointed out that the home improvement sector rose 15% and online sales rose 10%. And although 33 MM filed for unemployment, many were first-time filers who will hopefully regain their jobs this year. He emphasized 80% of the jobs lost are temporary losses, according to the US Labor Dept.
- There was a national housing inventory shortage before COVID-19, and this shortage has been exacerbated by sellers holding off during the pandemic. It has also led to an time high in PENDING contracts in May. And employees who have jobs are taking advantage of low rates, as mortgage applications are quickly recovering from the 35% March decline.
- Regionally: the southwest is recovering faster. Top three states: Especially Texas will recover fastest. The Northeast is in much worse shape. And by the way, a survey shows 60-90% of BUYERS don't anticipate any price drop.
- He predicts permanent changes after the Pandemic: end of open concept homes, need for offices, more work from home, less commuting; larger homes (home office spaces), maybe agree to move farther out to get more for your money.
- Delayed Inflation: If, in a few years, inflation and mortgage rates go up, remember that the person who buys a home now will benefit from two biggies:
- The home price will appreciate
- Their MORTGAGE PAYMENT will be the same as in 2020-2021- It will NOT rise due to inflation.
Here in Austin, we saw a sharp drop in pending sales from mid-March to mid-April, then a very sharp spring back up in May. See both charts above. (data source Austin Board of REALTORS)
