My Opinion on the Current Market
Having gone through several market shifts, I would say this market is a combination of September 11th and the economic meltdown of 2007.
Our economy has been very good and I believe our President has done all he could to prevent a recession. Though he cannot stop this global pandemic.
Right now resale home inventory is very low. New construction is completely on hold. In most areas we are still seeing multiple offers and houses selling over list prices. Many sellers are on hold due to the concern of bringing this virus openly into their homes. A valid concern, though our industry is doing all we can by adding restrictions to protect consumers.
Lenders have tightened up on their loans by raising credit scores for qualifying. This has not affected us now, though I believe will affect us by July. Conforming Conventional loans have held the same starting at 620 though our Government Loans (FHA, VA, USDA) have increased from 580 to 640. Right now FHA buyers still do not have much of a chance in our current market and get out bid most of the time. As more homes come on the market, and when we see more of a surplus, the reduction and loss of this buyer will affect us more.
High end sales are affected now due to lender guideline decreases in the jumbo loan. Some banks will not even do the jumbo loan. This forces buyers to put more money down. High end homes are sitting much longer on the market and unless these sellers can do some creative financing, we will see this market suffer for some time. This market will shift faster.
With the economic shut down of so many businesses, we have seen almost 1 out of 4 houses come back on the market due to job losses or job furloughs. I would highly recommend any buyer who gets out bid on a property to put in a back-up offer on those properties. Those have been missed opportunities that agents don't consider. As regulations open up and businesses are allowed to open, the buyers entering the market will improve. Unfortunately, many businesses will not survive this shut down or may take years to recover.
Passing the peak of the virus in our area, it is good to know that we are getting closer to life getting back to normal. A new normal though. People are always moving and houses selling. We will all adjust to the new norm and progressively grow.