Coldwell Banker Gosslee

More Homes, Please! Main Photo

More Homes, Please!


Coldwell Banker Gosslee's May Housing Market Report
Posted: June 29, 2020 by Jessica Wimberly

MORE HOMES PLEASE!

A friend’s 15 year old son had a great line, “I can’t believe we are living through something with COVID-19 that kids like me will get wrong on tests in 50 years!” Perceptive kid! But it definitely feels like we are living through an upcoming history book.

With everything that has gone on, you might be surprised to know that for all of 2020, Northwest Louisiana is only down 5% in total home sales. The beginning of the year was so strong that our overall numbers are shockingly pretty OK.

As expected, May was a rough month. We had only 403 closed sales in Caddo, Bossier and Desoto Parishes, down dramatically from the 477 we had last May. This tumble came because so many in March and April put their buying process on hold. May is when they would have closed.

But we definitely fared better than the overall U.S. according to the National Association of Realtors which just released its Existing Home Sales report. The number of U.S. homes sold dropped to an annualized rate of just 3.91 million, off 26.6% from a year ago. Wow!

At the same time, the median home price in the U.S. was $284,600, up 2.3% from a year ago and the 99th straight month with year-over-year increases.

We did not follow that trend here in Northwest Louisiana. Because 61% of the homes sold locally were $200,000 or less, our median price (middle of all homes sold) dropped by 10% to $161,900 for the month. It is astounding to think that our typical home is $122,700 less than the U.S. figure. That calls for another Wow!

Here is a comparison of what is happening in the U.S. vs. us in Northwest Louisiana:

 

U.S.

(change over May 2019)

Northwest LA

(change over May 2019)

Median Price

$285,600/ 2.3%

$161,900/-10%

Number of Sales

3.91 million/-26.6%

403/-16%

Inventory

1.55/-18.8%

1,567/-25%

Months’ Supply

4.8/ 10.4%

4.0/-25%

Days on Market

26/same

72/-9%


The most important stat we are watching at Coldwell Banker Gosslee is the inventory level. The number of homes for sale in our region is down dramatically. And this is not a good thing.

Very simply, we need more homes to come on the market.

There are currently 1,567 homes on the market, 530 – or 25% - less than were for sale last May. Our monthly-supply of homes is currently 4 months, the lowest since our President Brad Gosslee began charting it 13 years ago. For comparison sake, it was 5.4 months last year and 6.2 months three years ago. Read Brad's full local May market repor here.

Because we were not as deeply impacted by COVID-19 as other places, our real estate market was hurt, but not crushed. This meant that potential buyers who are still employed and financially secure are taking advantage of record low mortgage rates. But they are finding fewer quality homes in popular neighborhoods. This is leading to multiple bids which will lead to higher prices. We should see this reflected in the coming months when I write about the market.

And now that we are further opening our economy, our agents are reporting almost record levels of buyer interest. Our web traffic is up 13% over last May and our phones are ringing all of the time. If we don’t see more homes come on the market, we will have a severe shortage and prices will rise quickly.

If someone you know has mentioned they are thinking of selling their home, now may be a great time. Definitely let one of our Coldwell Banker Gosslee agents know or reach out directly to me and I’ll have someone contact you.

Want proof? Take a look at our inventory levels. You will notice a severe shortage at the lower end. Remember, a balanced market is considered a 6-month supply where neither the seller nor buyer has an advantage in negotiations. The lower the month supply, the more of a “sellers’ market” we have:

Price Range

2020
May Supply

2019

May Supply

Total

4.0

5.4

Under $100,000

3.3

4.7

$100,000-$200,000

3.4

4.2

$200,000-$300,000

3.5

5.1

$300,000-$400,000

4.7

8.2

$400,000-$500,000

7.7

11.8

$500,000

14.3

20.7


Sellers, especially those at the lower end who might be looking to “move up” have a unique opportunity. They can seemingly command top dollar because of the “seller’s market,” but at the higher price ranges, it’s either a relatively balanced or a “buyer’s market.” 

Also, sellers, who may have bought their home or refinanced as we came out of the recession, might have been reluctant to “move up” for fear of giving up their great mortgage interest rate. That is no longer a concern with our near record level rates.

Along with inventory, the most important stat currently is mortgage interest rates. Here are some basics of what the near all-time low rates mean to a buyer:

·       For those who qualify and take a traditional 30-year, fixed rate mortgage, you will pay a lower monthly payment each month for 30 years. That’s 360 months!

·       Some will put that monthly savings towards buying a home that might have been “out of reach” at higher mortgage rate levels.

·       As of last week, the national average for a 30-year, fixed rate loan (the most widely used) was just 3.43%.

·       It’s also important to remember that you don’t necessarily need a 20% down payment.

I updated an important chart that I shared in January. For those who are renting, I wanted to share it again because it might make sense to become a homeowner if you have the financial security and plan to stay in town for a few years:

Mortgage Rate (30 year fixed)

Mortgage Amount

June 2020 Monthly Payment

January 2020 Monthly Payment

Savings per month for 30 years

3.43

$161,900

$721

 

 

3.43

$200,000

$890

$926

$36

3.43

$250,000

$1,113

$1,158

$45

3.43

$300,000

$1,335

$1,389

$54

3.43

$350,000

$1,558

$1,621

$63

3.43

$400,000

$1,781

$1,852

$71

3.43

$450,000

$2,003

$2,084

$81

3.43

$500,000

$2,226

$2,316

$90

 

There are currently about 900 homes for sale in our market priced at $200,000 and below.  Click here to see all of them. For less than you are paying in rent, you may qualify to own a home of your own!

And don’t forget, if you have any questions, please ask any of our 150 agents in Shreveport and Bossier City or reach out to me at jessica@cbgosslee.com

 

 

 

 

 

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