Week after week, the surging real estate market continues to climb. But is now a good time to buy and sell real estate?
So, earlier this year, Realtor.com announced the release of their Housing Recovery Index, a weekly guide showing how the pandemic has impacted the residential real estate market. The index leverages a weighted average of four key components of the housing industry by tracking each of the following.
- Housing Demand – Which they calculate by the increase or decrease of online search activity.
- Home Price – The amount of growth in the average listing price.
- Housing Supply – The amount of growth in the number of new listings.
- Pace of Sales – How long it takes for a home to come onto the market to when it closes escrow.
The index compares the current status to the January 2020 market trend, as a baseline for pre-COVID market growth. The overall index is set to one hundred in this baseline period. The higher a market’s index value, the higher it’s recovery, and vice versa.
As we can see, on a national level the index shows how the real estate market started out very strong in early 2020, and then dropped dramatically at the beginning of March when the pandemic paused the entire economy. It also shows the strength of the recovery since an upward trend began at the beginning of May. If you notice today, the index stands at its highest point all year, including the time prior to the economic shutdown.
Although there is some evidence that the overall economic recovery may be slowing, the housing market is still gaining momentum. Zillow tracks the number of homes that are put into contract on a weekly basis.
Their latest report confirms that buyer demand is continuing to dramatically outpace this same time last year, and the percent increase over last year is growing. Of course, this is merely a national average. But as that old saying goes, Real Estate is Local in Nature.
Although our local numbers aren’t as encouraging as the national numbers, we can see a similar trend, just to a lesser extent, with new pending sales up 9.1% over the week of September 5th.
Unfortunately, Zillow doesn’t track the data for Ventura County. So looking at the greater Los Angeles, Long Beach, and Anaheim area is the closest indicator to how we are faring here in Southern California as a whole. As we can see, the housing market is not only outperforming the grim forecast from earlier in the year, but it is also eclipsing the actual success of last year.
As Frank Martell, President and CEO of CoreLogic explains it:
“On an aggregated level, the housing economy remains rock solid despite the shock and awe of the pandemic.”
So, whether you’re considering buying or selling, staying on top of the real estate market over the coming months will be essential to your success. And as I mentioned earlier, Real Estate is Local in Nature. If you want to know what is going on in your neighborhood, or in an area you are possibly looking to move, go ahead and give me a call. Sites like Realtor.com and Zillow are fine for gaining a broad understanding of what’s going on in the market. But when it comes to your home, or your next move, you’ll want an actual person with boots on the ground, and a deep understanding of your local marketplace. So, give me a call anytime.