Accepted Offers: the Curve is Flattening
The best current indicator of market activity I can find is the number of properties receiving accepted offers week by week.
This chart compares the number of SFHs receiving accepted offers week by week in 2019 and 2020 in the 34 cities and towns of Essex County (I have used Essex County to get a large enough sample to be significant.)
For the first 9 weeks of the year – through March 6, 2020 (March 8, 2019) – the number of accepted offers was slightly ahead in 2020: averaging 91 vs 87 in 2019.
The number of accepted offers then started to drop: by 17, 19, 25, 67 and this past week by 87. But the actual number of Accepted Offers saw a small increase from the previous week.
The curve is flattening
We have learned to be on the lookout for the flattening of the curve with COVID_19 so let’s apply the same technique to the housing market. This chart shows the percentage change each week compared with 2019:
This is the change in the last few weeks:
While this last week showed a slightly larger decline than the week before, the pace of decline has slowed – or flattened. Bear in mind, this was Holy Week and if you look at the first table, week 16 in 2019 – which was Holy Week – saw an almost 40% drop from the week before.
Outlook
April traditionally sees an uptick in market activity – the “spring market”. In 2019, the weekly average – even allowing for the drop in Holy Week – in the four full weeks of April was 146 accepted offers.
Adding to the economic uncertainty is the challenge of viewing properties, but we are rapidly developing a new norm for the process as buyers and sellers adapt.
It seems likely that the number of accepted offers will continue to trail below last year’s levels, but properties are still selling. It will be instructive to see if the level of activity picks up as cash from the many stimulus programs starts to arrive.
While activity will drop, it is not clear what the impact will be on prices. I suspect that will be a case-by-case situation depending upon the specific circumstances of sellers. Essex County is largely a first home – meaning primary residence – market. Contrast that with Naples, Florida – a second or vacation home market, where 65% of properties which went under agreement in the last 3 weeks have come back on to the market.
As with the economy at large, the housing market entered this shutdown from a position of strength: a chronic shortage of supply and low mortgage rates. The best outcome might be a resetting of the supply/demand imbalance creating a stable market.
A Calmer Mortgage Market
Recession and Recovery
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listings week ending April 10
A small number of New Listings again but properties are still selling – at least two of these have already received offers:
Marblehead New Listings
Swampscott New Listings
Salem New Listings
Beverly New Listings
Lynn New Listings
A Calmer Mortgage Market
Recession and Recovery
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
All properties currently for sale
As there are no Open Houses currently, I am replacing the normal Open House post with one showing details of all houses and condos currently available for sale. Different arrangements are being made for viewing – some are video or faceTime only – so please contact me to see what is possible. But properties are still selling in this environment.
Click on these links for full details of each of the properties:
Marblehead SFHs For Sale
Marblehead Condos For Sale
Swampscott SFH For Sale
Swampscott Condos For Sale
Salem SFHS For Sale
Salem Condos For Sale
Beverly SFHs For Sale
Beverly Condos For Sale
Lynn SFHs For Sale
Lynn Condos For Sale
Why are Mortgage Rates Jumping?
Recession and Recovery
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listings April 8
These are the most recent New Listings as buyers and sellers are making creative arrangements for viewing:
Marblehead New Listings
Swampscott New Listings
Salem New Listings
Beverly New Listings
Lynn New Listings
A Calmer Mortgage Market
Recession and Recovery
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
A Calmer Mortgage Market
After the spike in mortgage rates two weeks ago, the market has calmed down as the Federal Reserve stepped in to buy mortgage-backed securities (MBS).
As I commented in my Why are Mortgage Rates Jumping? post two weeks ago: “Lenders are overwhelmed by refinancing requests and are keeping rates up to slow demand; and the buyers of mortgage-backed securities – the ultimate determinant of rates – are balking at lower rates.”
The traditional spread between the 30-year Fixed Rate Mortgage (FRM) and 10-year Treasury (10T) remains elevated, as this table shows:
The most likely outcome is that, as the US economy rebounds later this year, the yield on 10T will rise and the risk premium demanded by buyers of MBS decline, narrowing the spread. But there are no models for this pandemic, and no forecasts – just guesstimates at this stage.
Andrew Oliver
www.OliverReports.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Accepted Offers Plummet
The best current indicator of market activity I can find is the number of properties receiving accepted offers week by week. With all the uncertainties currently, it would be reasonable to expect the pace of sales to drop. Let’s see if that has happened.
This chart compares the number of SFHs receiving accepted offers week by week in 2019 and 2020 in the 34 cities and towns of Essex County (I have used Essex County to get a large enough sample to be significant.)
2019: week 1 is week ending January 11; week 13 ending April 5
2020: week 1 is week ending January 10; week 13 ending April 3
For the first 9 weeks of the year – through March 6, 2020 (March 8, 2019) – the number of accepted offers was slightly ahead in 2020: averaging 91 vs 87 in 2019.
The number of accepted offers then started to drop: by 15, then 19, then 21 – and finally this past week by 72 (there may be a few late reports of offers accepted last Friday in which case I will update the numbers reported here.)
Outlook
April traditionally sees an uptick in market activity – the “spring market”. In 2019, the weekly average – even allowing for a drop in Holy Week (week 16)- in the four full weeks of April was 146 accepted offers.
Adding to the economic uncertainty is the challenge of viewing properties. It seems likely, therefore, that the number of accepted offers will continue to trail well below last year’s levels. Perhaps the biggest surprise is that it took until this last week for the drop to start in earnest.
While activity will drop, it is not clear what the impact will be on prices. I suspect that will be a case-by-case situation depending upon the specific circumstances of sellers.
As with the economy at large, the housing market entered this shutdown from a position of strength: a chronic shortage of supply and low mortgage rates. The best outcome might be a resetting of the supply/demand imbalance creating a stable market.
A Calmer Mortgage Market
Recession and Recovery
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listings week ending April 3
With no Open Houses please call to discuss showing options for these New Listings:
Marblehead New Listings
Swampscott New Listings
Salem New Listings
Beverly New Listings
Lynn New Listings
Why are Mortgage Rates Jumping?
Recession and Recovery
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
List of all currently available properties
As there are no Open Houses currently, I am replacing the normal Open House post with one showing details of all houses and condos currently available for sale. Different arrangements are being made for viewing – some are video or faceTime only – so please contact me to see what is possible.
Click on these links for full details of each of the properties:
Marblehead SFHs For Sale
Marblehead Condos For Sale
Swampscott SFH For Sale
Swampscott Condos For Sale
Salem SFHS For Sale
Salem Condos For Sale
Beverly SFHs For Sale
Beverly Condos For Sale
Lynn SFHs For Sale
Lynn Condos For Sale
Why are Mortgage Rates Jumping?
Recession and Recovery
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Housing Inventory continues to shrink
Single Family Homes (SFH)
After years of decline, the number of Single Family Homes (SFH) for sale in Essex County on the first of the month compared with a year earlier (YOY) increased from August 2018 until June 2019. Since then the decline has resumed, as this table shows:
The next two charts (the first for January to June; the second July to December) show the number of SFHs for sale on the first of the month since 2017. In the first chart the numbers for 2020 YOY show the renewed decline (in 2019 inventory was increasing until June). (more…)
New Listings April 1
These are the most recent New Listings as buyers and sellers are making creative arrangements for viewing: (more…)
Recent Comments