What a difference a year makes! Last February, coronavirus was a soft murmur, not a screaming headline, and the economy was booming… Change may not always be welcome, but it is part of life. Learning how to ‘roll with the punches’ has proven to be a useful skill these past 12 months. February 2021 was a continuation of the most recent trends in the real estate market, with low inventory, but more sales at higher prices.
February 2020 Flashback Quotes:
“Fortunately for the U.S. economy, job creation was again strong in January when 225,000 net new payroll jobs were added. We expect the strong foundation for the U.S. consumer sector to keep overall economic momentum positive for the U.S. this year,” February 2020 U.S. Economic Outlook, by Robert A. Dye, Ph.D. and Daniel Sanabria of Comerica.
The Kenosha, Racine and Walworth County Local Market Reports by MetroMLS & ShowingTime, are below, as well as that of my hyper-local, Lake Geneva area market. Throughout Southeastern Wisconsin, there were fewer new listings coming onto the market, but more homes being sold, at higher median sales prices (with the exception of Racine County, which had a slight -1.1% decrease in median sales price) in February 2021, compared to last year. Also, note that we have all seen a drastic decrease in number of days on the market – year to date and year over year.
Mortgage interest rates ticked a bit higher in February but remain below their February 2020 levels. Interest rates may rise a bit further in coming weeks, but according to Freddie Mac chief economist Sam Khater, “while there are multiple temporary factors driving up rates, the underlying economic fundamentals point to rates remaining in the low 3 percent range for the year.” With rates still at historically low levels, home sales are unlikely to be significantly impacted, though higher rates do impact affordability. […]
For homeowners currently struggling due to COVID-19, government agencies are continuing efforts to help those in need. The Federal Housing Finance Agency announced they will allow homeowners with loans backed by Fannie Mae and Freddie Mac to receive an additional three months of forbearance, extending total payment relief to up to 18 months. Qualified homeowners must already be in a forbearance plan as of the end of February.Monthly Indicators by Dan Zielinski | Mar 15, 2021 | FlexMLS, Metro MLS
Next, I investigated the difference in showings across our tri-county area, compared to last year, using the Target Market Analysis by ShowingTime®. The more I thought about it, the more sense it made: of course there were technically more showings in February 2020. With our current low inventory, there were simply less homes to see in February 2021. Interestingly enough, you’ll notice an uptick in showings for listings over $600,000 since last year. This is definitely something to pay attention to!
Recent Market Reports:
- “More Than 200,000 New Listings Are Missing From U.S. Housing Market,” according to the February 2021 Monthly Housing Market Trends Report, by Sabrina Speianu, Realtor.com®
- “After a brief pause, mortgage rates continued their recent rise. Changes by Fannie Mae and Freddie Mac’s overseeing agency will likely make it more expensive to mortgage second homes and investment properties. And consumer optimism is finally showing signs of improvement,” Zillow Market Pulse: March 12, 2021, by Matthew Speakman, © Zillow, Inc.
- “U.S. homebuilding dropped to a six-month low in February as severe cold gripped many parts of the country, in a temporary setback for a housing market that remains supported by extremely lean inventories amid strong demand for larger homes,” U.S. housing market takes breather amid bitterly cold weather by © CNBC LLC.
Sellers: It is still a sellers’ market, but we do not know how long it will last. Interest rates have already gone up a little. If interest rates continue to rise, this could negatively affect buyer demand. This is the time to list before anything changes.
Your free, instant Home Valuation here: AnniesHomeValuez.com
Buyers: It is still a good time to buy! Mortgage interest rates are still relatively low, but they have creeped up. This is crunch time, if you want to buy a home in 2021. Have your pre-approval ready to go, before seeing homes. Be flexible, and do your research on comparable home sales.
The silver lining around the past years’ pandemonium has to be the renewed importance of “home.” Clearly, a house is much more than plywood and nails. As more jobs go remote and kids attend school virtually, the more crucial it is to love where you live. If home is where the heart is: have you found yours?
Happy (ALMOST) Spring!
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