Stopped Paying Mortgage | The 2020 Real Estate Collapse

Lets discuss the upcoming real estate collapse, the setbacks of mortgage forbearance, and how this impacts values – enjoy! Add me on Instagram: GPStephan

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We can start by looking at Redfin, who’s one of the leading real estate brokerages who analyzes home buying and selling data. They found that – in April – we saw a 50% DECLINE of inventory on the market compared to the previous year…meaning, 50% of sellers are holding off from listing their home and choosing NOT to sell.

HOWEVER…NOW, in May…we’re finding only a 24% drop in listings from the prior year, which indicates that sellers are SLOWLY beginning to re-enter the market and list their homes for sale, although there’s still far less inventory on the market than usual.

NEXT – as far as LISTING PRICES are concerned – meaning, the price a seller LISTS a property at…Redfin found that listing prices are UP 5.4% from the previous year, following a 1.7% drop in April that brought the average listing price down to $302,000.

BUT EVEN MORE SURPRISING was the surge in HOME BUYING DEMAND, which has just surpassed PRE CRISIS levels. Now, for anyone unaware…Redfin classifies home buying demand as anyone who reaches out to tour a property, make an offer, or inquire about buying a home…and this shows that there are still people out there, wanting to buy, and waiting for the right opportunity to do so.

And…the shock of home buying doesn’t end there…they found that homes are selling at the EXACT SAME SPEED as they were back in 2019…meaning, as of May 8th…45% of listings are under contract within 2 weeks, with mortgage applications up 11% from a week earlier.

BUT…with all of that, I’m sure what we ALL want to know about is PRICE…are real estate PRICES going UP, or DOWN? And data from the National Association of Realtors found that home PRICES actually INCREASED in 96% of all Metros during the first quarter.

CoreLogic, one of the largest data analytics companies, found that – even though prices have risen 4.5% year over year…they expect that, over the next year, we’ll only see an increase of half a percent from where we are now.
https://www.corelogic.com/insights-download/home-price-index.aspx

Zillow also published their own predictions, which estimated that real estate values would drop 2.7% by October of this year.
https://www.zillow.com/research/prices-sales-forecast-coronavirus-26975/

HOWEVER…I also want to be a total realist and say this: The reason home prices have yet to be affected, is because real estate prices typically lag behind everything else. In addition to that, interest rates are INCREDIBLY low…so much so, that it’s essentially FREE MONEY for anyone who gets an interest rate below 3.5%.

The OTHER reality, is that anyone who doesn’t NEED to sell a home, isn’t selling a home. There are plenty of people who were planning to move, but just decide, instead, to hold off…that means less inventory on the market, and with less inventory – combined with low interest rates – housing prices should remain relatively stable.

So, even though as of RIGHT NOW – housing has barely been impacted – there are a lot of “What ifs” that could mean the difference of prices continuing to hold steady, OR the market going down.

For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com

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