Lack of inventory in Nevada County continues to be a feature of the current real estate market.
621 houses for sale July 2019 vs 297 houses for sale July 2020, a significant 52.6% decline. That’s a reduction from 4.3 months of inventory to 1.3 months of inventory, a very strong SELLER’S MARKET.
THE average SOLD price per square foot is up 6.7% year to year ($255 vs $239). Average price sold is up 13.4%, from $493,000 to $559,000. Higher list prices are prevailing.
Units PENDING are up 86.3%. While Nevada County has long been a magnet for buyers from the SF Bay Area, and to a lesser extent, the Los Angeles region, we believe the relative safety of our area continues to drive interest and sales. The pending numbers support that.
If you are contemplating selling a property, we have rarely seen a better time!
Don’t hesitate to call us for evaluations of your home’s value or to tour homes on the market you have interest in. We are here for you, and Alisa always answers her cell phone, 530-559-4871.
Fed ‘Not Even Thinking’ About Raising Rates, Real Estate on the Rebound
By Liz Dominguez
The Federal Open Market Committee (FOMC) met this week, leaving interest rates near zero to help buoy an economy heavily hit by the current health crisis.
“The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in keeping the virus in check,” Fed Chair Jerome H. Powell said in a statement, adding that the “pace of recovery looks like it has slowed,” as more states continue to battle a second wave of increasing coronavirus cases.
The Fed will continue to monitor the markets but, as of now, is not “even thinking about” raising rates and will keep rates low “until it is confident that the economy has weathered recent events.”
Recent data shows just how much the coronavirus pandemic has impacted the economy. According to the Commerce Department, the U.S. GDP (gross domestic product) fell 9.5 percent in the second quarter of the year—on an annualized basis, GDP fell at a rate of 32.9 percent.
“As expected, economic activity collapsed in the second quarter due to the total virus-lockdown in April and only partial re-openings in May. The GDP contraction of 33 percent on an annualized basis is the steepest ever experienced in the U.S.,” said Dr. Lawrence Yun, chief economist, National Association of REALTORS® (NAR). “Even with the stimulus and enhanced unemployment benefits, consumer spending collapsed by a massive 35 percent. Business spending also collapsed by 27 percent. Even residential investments—comprising of home sales, home building and remodeling activity—dropped by nearly 40 percent.
“This morning’s advance report on second quarter GDP showed that the economy contracted 32.9 percent—the largest single quarter drop on record—as COVID-19-driven business closures and restrictions on in-person activity sharply reduced consumer spending and business investment,” said Joel Kan, AVP of Economic and Industry Forecasting, Mortgage Bankers Association (MBA). “In recent weeks, housing demand has rebounded sharply, and we expect the rest of the economy to recover in the second half of the year.
Third quarter data should be more optimistic as states began reopening amid a decline in COVID cases.
“The good news is that this data is backward-looking. Third quarter data will show a massive increase. Personal savings rates are the highest ever, with massive deposits at banks,” said Yun. “There will be an unleashing of spending in the upcoming months as economies open further. Home sales have already been rising strongly and will continue to do so. GDP growth in the third quarter could be as high as 30 percent. Note: This data will come out three days before the November election.”
However, with the last few weeks showing deterioration across various states, the economic rebound could slow. Unemployment filings totaled 1.43 million last week, according to the Labor Department—the second weekly increase.
“The adverse impacts to the job market and hardships for many households may persist—especially if virus cases continue to rise in several parts of the country,” said Kan. “There are still many workers who have not returned to work, households in need of mortgage or rent forbearance, and an overall sense of uncertainty ahead. We expect the Federal Reserve to keep rates low, and monetary policy supportive, until there are clearer signs of an economic recovery.”
An upside to the Fed’s near-zero lock-in? Fed rates can indirectly influence mortgage interest rates, which just decreased slightly according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS®).
“It’s Groundhog Day in the mortgage market as rates continue to remain near historic lows, driving purchase demand over 20 percent above a year ago,” said Sam Khater, Freddie Mac’s chief economist. “Real estate is one of the bright spots in the economy, with strong demand and modest slowdown in home prices heading into the late summer. Home sales should remain strong the next few months into the early fall.”
Here’s the breakdown:
– 30-Year Fixed-Rate Mortgage: Averaged 2.99 percent with an average 0.8 point for the week ending July 30, 2020, down slightly from 3.01 percent. A year ago at this time, the 30-year FRM averaged 3.75 percent.
– 15-Year Fixed-Rate Mortgage: Averaged 2.51 percent with an average 0.7 point, down from last week when it averaged 2.54 percent. A year ago at this time, the 15-year FRM averaged 3.20 percent.
– 5-Year Treasury-Indexed Hybrid Adjustable-Rate Mortgage (ARM): Averaged 2.94 percent with an average 0.4 point, down from last week when it averaged 3.09 percent. A year ago at this time, the 5-year ARM averaged 3.46 percent.
“We expect that the Fed may strengthen their forward guidance on the future path of interest rates at their September meeting, providing more explicit signals as to which factors could lead them to eventually raise short-term rates,” said Mike Fratantoni, SVP and chief economist of MBA. “In the meantime, we expect mortgage rates will stay near all-time lows. These record-low mortgage rates will continue to provide stimulus to homeowners who refinance and lower their monthly payments, while also boosting homebuyer demand and their purchasing power.”
Liz Dominguez is RISMedia’s senior online editor.