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What Impact Might COVID-19 Have on Home Values?

What Impact Might COVID-19 Have on Home Values?

A big challenge facing the housing industry is determining what impact the current pandemic may have on home values. Some buyers are hoping for major price reductions because the health crisis is straining the economy.

The price of any item, however, is determined by supply and demand, which is how many items are available in relation to how many consumers want to buy that item.

In residential real estate, the measurement used to decipher that ratio is called months supply of inventory. A normal market would have 6-7 months of inventory. Anything over seven months would be considered a buyers’ market, with downward pressure on prices. Anything under six months would indicate a sellers’ market, which would put upward pressure on prices.

Going into March of this year, the supply stood at three months – a strong seller’s market. While buyer demand has decreased rather dramatically during the pandemic, the number of homes on the market has also decreased. The recently released Existing Home Sales Report from the National Association of Realtors (NAR) revealed we currently have 3.4 months of inventory. This means homes should maintain their value during the pandemic.

This information is consistent with the research completed by John Burns Real Estate Consulting, which recently reported:

“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices).”

What are the experts saying?

Here’s a look at what some experts recently reported on the matter:

Ivy Zelman, President, Zelman & Associates

“Supported by our analysis of home price dynamics through cycles and other periods of economic and housing disruption, we expect home price appreciation to decelerate from current levels in 2020, though easily remain in positive territory year over year given the beneficial factors of record-low inventories & a historically-low interest rate environment.”

Freddie Mac

“The fiscal stimulus provided by the CARES Act will mute the impact that the economic shock has on house prices. Additionally, forbearance and foreclosure mitigation programs will limit the fire sale contagion effect on house prices. We forecast house prices to fall 0.5 percentage points over the next four quarters. Two forces prevent a collapse in house prices. First, as we indicated in our earlier research report, U.S. housing markets face a large supply deficit. Second, population growth and pent up household formations provide a tailwind to housing demand. Price growth accelerates back towards a long-run trend of between 2 and 3% per year.”

Mark Fleming, Chief Economist, First American

“The housing supply remains at historically low levels, so house price growth is likely to slow, but it’s unlikely to go negative.”

Bottom Line

Even though the economy has been placed on pause, it appears home prices will remain steady throughout the pandemic.

Candy’s Dirt Highlights Owner of JP & Associates REALTORS®, JP Piccinini, in Latest Feature

Candy’s Dirt Highlights Owner of JP & Associates REALTORS®, JP Piccinini, in Latest Feature

Source: JP Piccinini: No More 1970s Way of Selling Real Estate | by Candy Evans – CandysDirt.com

A recent publication by award-winning journalist and Founder of Candy’s Dirt, Candy Evans, explores the insights of CEO of Vesuvius Holdings and Founder/Owner of JP & Associates REALTORS® (JPAR), JP Piccinini, on the importance of providing a high value, low-cost, agent-centric business model during uncertain times.

The feature gives a nod to Piccinini’s multi-award-winning and innovative brokerage, highlighting its recent ranking as the nation’s 50th most productive brokerage in transactions by the Real Trends 500. It also mentions how the company is ranked among the Swanepoel Mega 1000 list of top brokerages in the country and goes on to detail its franchise success.

A 100-percent-commission, full-service model, Candy also writes on the brokerage’s minimal transaction fees, cap, and production requirements.

Before concluding, the publication also accredits several of the company’s most innovative offerings, including its iBuyer, Instant Offers program, agent health care plans, and most recently, partnership with Matterport, a 3D virtual tour company. It also notes JP waived minimum transaction fees for franchisees and reduced the fee to onboard new agents by 50 percent, one of several COVID-19 reductions for the month of April.

Hosted by Candy, the article ends with a link to a one-on-one video interview with JP. 

Candy Interviews JP Piccinini, Owner of JP & Associates REALTORS®

The full story published via CandysDirt.com can be read here.

About JP and Associates REALTORS®
At JP & Associates REALTORS®, we’ve built a company that focuses on putting agents first. Opening in 2011, JPAR is taking the real estate industry by storm and JPAR Franchising has earned accolades such as Top 10 Hottest Franchise (according to Inc.), a three-time Inc. 5000 honoree (2019: #1004), and the Fastest-Growing 100% Commission Brokerage and Franchise in the USA (according to Real Trends 500). Since offering franchise services in 2018, JPAR has expanded to 14 states in addition to the brokerage in Texas.

JPAR operates multiple offices across Alabama, Arizona, D.C., Indiana, Florida, Georgia, Kentucky, Louisiana, Maryland, Michigan, New Mexico, North Carolina, South Carolina, Virginia, and Texas.

JPAR is expanding nationwide and offers franchising opportunities for entrepreneurial real estate professionals.

To inquire about franchising or to learn more, please, fill out the following:

 

  • By submitting your information, you agree to send your info to JP & Associates REALTORS® and/or JPAR Franchising, LLC. who agrees to use it in accordance with our privacy policy.

Keys to Selling Your House Virtually

Keys to Selling Your House Virtually

In a recent survey by realtor.com, people thinking about selling their homes indicated they’re generally willing to allow their agent and some potential buyers inside if done under the right conditions. They’re less comfortable, however, hosting an open house. This is understandable, given the health concerns associated with social contact these days. The question is, if you need to sell your house now, what virtual practices should you use to make sure you, your family, and potential buyers stay safe in the process?

In today’s rapidly changing market, it’s more important than ever to make sure you have a digital game plan and an effective online marketing strategy when selling your house. One of the ways your agent can help with this is to make sure your listing photos and virtual tours stand out from the crowd, truly giving buyers a detailed and thorough view of your home.

So, if you’re ready to move forward, virtual practices may help you win big when you’re ready to sell. While abiding by state and local regulations is a top priority, a real estate agent can help make your sale happen. Agents know exactly what today’s buyers need, and how to put the necessary digital steps in place. For example, according to the same survey, when asked to select what technology would be most helpful when deciding on a new home, here’s what today’s homebuyers said, in order of preference:

  • Virtual tour of the home
  • Accurate and detailed listing information
  • Detailed neighborhood information
  • High-quality listing photos
  • Agent-led video chat

After leveraging technology, if you have serious buyers who still want to see your house in person, keep in mind that according to the National Association of Realtors (NAR), there are ways to proceed safely. Here are a few of the guidelines, understanding that the top priority should always be to obey state and local restrictions first:

  • Limit in-person activity
  • Require guests to wash their hands or use an alcohol-based sanitizer
  • Remove shoes or cover with booties
  • Follow CDC guidance on social distancing and wearing face coverings

Getting comfortable with your agent – a true trusted advisor – taking these steps under the new safety standards might be your best plan. This is especially important if you’re in a position where you need to sell your house sooner rather than later.

Nate Johnson, CMO at realtor.com ® notes:

“As real estate agents and consumers seek out ways to safely complete these transactions, we believe that technology will become an even more imperative part of how we search for, buy and sell homes moving forward.”

It sounds like some of these new practices might be here to stay.

Bottom Line

In a new era of life, things are shifting quickly, and virtual strategies for sellers may be a great option. Opening your doors up to digital approaches may be game-changing when it comes to selling your house. Let’s connect so you have a trusted real estate professional to help you safely and effectively navigate through all that’s new when it comes to making your next move.

JP & Associates REALTORS® (JPAR) Expands into Jeffersonville, Indiana

JP & Associates REALTORS® (JPAR) Expands into Jeffersonville, Indiana

JPAR Franchising, LLC (Franchising Division of JP & Associates, REALTORS®) has recently entered into a new expansion agreement to further the brand’s presence throughout the United States with the opening of its first office in Indiana. Scheduled to open August 2020, the new franchise will be located in Jeffersonville, servicing multiple areas throughout the state, as well as Louisville, KY.

Having sold over 60 offices, JP & Associates, REALTORS® (JPAR) continues its rapid expansion as America’s fastest-growing 100% commission brokerage (REAL Trends) and top ten hottest business franchise in the US (Inc. Magazine).

Geoff Lewis, Chief Executive Officer of JPAR Franchising, commented, “We are thrilled to open our first Indiana office under the reputable expertise and guise of its new owners.” He added, “Soon, agents throughout the area will have access to best-in-class resources backed by innovative and supportive leadership. We look forward to supporting the growth of this office and its plans to go above and beyond for its customers.”

About JP and Associates REALTORS®
At JP & Associates REALTORS®, we’ve built a company that focuses on putting agents first. Opening in 2011, JPAR is taking the real estate industry by storm and JPAR Franchising has earned accolades such as Top 10 Hottest Franchise (according to Inc.), a three-time Inc. 5000 honoree (2019: #1004), and the Fastest-Growing 100% Commission Brokerage and Franchise in the USA (according to Real Trends 500). Since offering franchise services in 2018, JPAR has expanded to 15 states in addition to the brokerage in Texas.

JPAR operates multiple offices across Alabama, Arizona, Colorado, D.C., Florida, Georgia, Louisiana, Maryland, Michigan, New Mexico, North Carolina, South Carolina, Virginia, and Texas.

JPAR is expanding nationwide and offers franchising opportunities for entrepreneurial real estate professionals.

To inquire about franchising or to learn more, please, fill out the following:

 

  • By submitting your information, you agree to send your info to JP & Associates REALTORS® and/or JPAR Franchising, LLC. who agrees to use it in accordance with our privacy policy.

Will This Economic Crisis Have a V, U, or L-Shaped Recovery?

Will This Economic Crisis Have a V, U, or L-Shaped Recovery?

Many American businesses have been put on hold as the country deals with the worst pandemic in over one hundred years. As the states are deciding on the best strategy to slowly and safely reopen, the big question is: how long will it take the economy to fully recover?

Let’s look at the possibilities. Here are the three types of recoveries that follow most economic slowdowns (the definitions are from the financial glossary at Market Business News):

  • V-shaped recovery: an economic period in which the economy experiences a sharp decline. However, it is also a brief period of decline. There is a clear bottom (called a trough by economists) which does not last long. Then there is a strong recovery.
  • U-shaped recovery: when the decline is more gradual, i.e., less severe. The recovery that follows starts off moderately and then picks up speed. The recovery could last 12-24 months.
  • L-shaped recovery: a steep economic decline followed by a long period with no growth. When an economy is in an L-shaped recovery, getting back to where it was before the decline will take years.

What type of recovery will we see this time?

No one can answer this question with one hundred percent certainty. However, most top financial services firms are calling for a V-shaped recovery. Goldman Sachs, Morgan Stanley, Wells Fargo Securities, and JP Morgan have all recently come out with projections that call for GDP to take a deep dive in the first half of the year but have a strong comeback in the second half.Will This Economic Crisis Have a V, U, or L-Shaped Recovery? | Keeping Current Matters

Is there any research on recovery following a pandemic?

There have been two extensive studies done that look at how an economy has recovered from a pandemic in the past. Here are the conclusions they reached:

1. John Burns Consulting:

“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices), and some very cutting-edge search engine analysis by our Information Management team showed the current slowdown is playing out similarly thus far.”

2. Harvard Business Review:

“It’s worth looking back at history to place the potential impact path of Covid-19 empirically. In fact, V-shapes monopolize the empirical landscape of prior shocks, including epidemics such as SARS, the 1968 H3N2 (“Hong Kong”) flu, 1958 H2N2 (“Asian”) flu, and 1918 Spanish flu.”

The research says we should experience a V-shaped recovery.

Does everyone agree it will be a ‘V’?

No. Some are concerned that, even when businesses are fully operational, the American public may be reluctant to jump right back in.

As Market Business News explains:

“In a typical V-shaped recovery, there is a huge shift in economic activity after the downturn and the trough. Growing consumer demand and spending drive the massive shift in economic activity.”

If consumer demand and spending do not come back as quickly as most expect it will, we may be heading for a U-shaped recovery.

In a message last Thursday, Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank, agrees with other analysts who are expecting a resurgence in the economy later this year:

“We’re forecasting real economic growth of 30% for the U.S. in the 4th quarter of this year and 6.1% in 2021.”

His projection, however, calls for a U-shaped recovery based on concerns that consumers may not rush back in:

“After the steep plunge and bottoming out, a ‘U-shaped’ recovery should begin as consumer confidence slowly returns.”

Bottom Line

The research indicates the recovery will be V-shaped, and most analysts agree. However, no one knows for sure how quickly Americans will get back to “normal” life. We will have to wait and see as the situation unfolds.

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