Real Estate Market Update November 2021

Is the Housing Market Slowing?  Or is the real estate market leveling off?  These are questions many of you are asking, so we're going to take a look, and I'll show you what's happening!

Welcome to our REAL ESTATE MARKET UPDATE for November 2021. I’m Erik Braceland with Braceland Homes here in sunny San Diego, California, where we guarantee the sale and/or purchase of your home.  In the unlikely event we can't sell it, we’ll just buy your home from you ourselves. Here on the Braceland Homes channel we cover topics related to buying and selling residential real estate.  Please consider subscribing to our channel if you like this video, so you can be notified of future content as I produce it.

We'll start off here with this familiar Showing Time graphic. For those of you that are new here, Showing Time is a popular scheduling app used by agents to schedule showings for homes their clients are interested in viewing.  Going all the way back to January, we’ve used Showing Time as a leading indicator in real estate of what is happening relative to activity. If you look at this going all the way back, you see the dip during the pandemic lockdown and then coming back up, cramming a bunch of business into the first part of this year, seeing a lot of action, and now we’re starting to level off.  If you remember, I’ve said in the past, that we’re ahead of where we were this time last year,” and now, you see this yellow line here, we’re slightly below where we were this time last year, with September being the most recent data. Why is this important? It's important because you know a lot of people are wondering...is the market starting to slow down, or is the market leveling off? 

I always want to bring you perspective, so my team pulled the Showing Time data going all the way back to 2017, and what do you see there? 2017, 2018, 2019 probably the most normal markets we can look at, the pandemic in 2020, certainly not a normal market, and we’ve kind of comedown from where we were at this time last year but well ahead of where we were the years coming into 2020. Why is this important? Because yeah, we’re starting to see the market level off a little bit there, or normalize maybe is a better word, but well ahead of where we were coming into the pandemic. And that's important to keep in mind.  Very, very important. It’s important because, you know maybe we think, man, things are really slowing down! And perhaps we're talking with people in our office, friends and family about what’s happening out in the market. It's easy to get the wrong idea about things when we don't have all the facts.  No doubt every market across the country could use more inventory because every market across the country has more buyers than homes to buy, and we want to see more and more inventory come into the market.

I want to give you a perspective from Bill McBride from the Calculated Risk blog, he said this, “Sales, non-seasonally adjusted in September were 548,000.  That was 2.7 percent below sales in September of 2020, which was 563,000, but excluding last September, which was obviously distorted by the delayed selling season...were the strongest since 2005!” So, if we take last year's abnormality due to the pandemic out of the equation, then 2021 has had the strongest real estate market on record since 2005!  Pretty remarkable.  Let me ask you a question here. Do you hear anybody talking about that right now, talking about home sales being very, very good? Maybe a few but certainly not a lot, and you’re certainly not hearing that in the main-stream media!

I firmly believe that headlines do more to terrify than they do to clarify what’s going on, and I'm sure you've seen the clickbait about the real estate market that’s out there that oftentimes misleads people. Maybe the article is factual, maybe the information is factual, but it’s got a clickbait type  headline. And many of us don’t bother to read the article because we lead busy lives, and then we just make an assumption off that headline.  Perhaps then we discontinue our plans to buy or sell a home and put our life on hold, based on that misleading headline.  What a tragedy that could be.

I want to give you a couple of articles that are out there right now, “Foreclosures are shooting up. Is this a repeat of the early 2000s housing crisis?” You know that is a headline that I think we can expect to see more of. I spoke about this recently, about foreclosure starts being up 49 percent last month according to

 

ATTOM Data, as you can see in the bar graph overlay.  And this is an example of being factually correct, but nowhere near where we were in 2019, going back to the more normal market. We should expect foreclosures to be up, as the moratoriums have been lifted. So, expect to see that.  

CNBC came out and said this, “Mortgage originations will drop 33 percent in 2022 as interest rates rise according to the industry forecast.” What many of us don’t do, is take the time to read into the article, and I’ll bring that up real quick. If you go into the article, what they actually say is that refinance originations will drop 62 percent in 2022, to 860 billion. Again, that's refinance originations, which is a specific type of mortgage origination, will drop.  And that makes sense. In a rising interest rate environment, like we're in right now, we’ll see less refinances. However, they go on to say, “Mortgage originations, for the purpose of buying a home, are forecasted to rise 9 percent, to a record 1.73 trillion next year.” So, the headline doesn’t do really anything to inform a home buyer or even lead them down the right path. You have to go into the article to begin to do that.  And over and over, we see and hear these headlines, and start thinking "I don’t know if now is a good time to buy, I don’t know if now is a good time to move forward with my real estate plans."  It's unfortunate because we get wrapped up in these headlines and postpone what we want to do because of them.  I consider it my duty to bring the truth to the market, so if you want to continue to get the straight scoop please consider subscribing to our channel. 

I do want to bring another report in here that I think really emphasizes this point. This is University of Michigan Consumer Sentiment, “Do you think it’s a good time to buy a home?” Well, if you look back at 2020, you know February of 2020, 70 percent of people saying yes, I think it’s a good time to buy a home. Well, if you move forward to September of 2020, a little bit less, 65 percent. Well today, as of September of 2021, about one out of three people think it’s a good time to buy a home. A big reason for that is people have been misinformed about what’s happening in real estate.  I've No doubt there are buyers that are frustrated right now. There are buyers who are looking at prices going "it’s getting a little bit too hot". My advice to you is Buy Now, but stay with us and tune in next week when I'll review the housing market 2022 forecast.  I'll show you that we’re going to continue to see home price appreciation going into next year.