March 24th Twin Cities market update, COVID19 update, and more
Duration: 08:39
Hey, it's Travis Anderson here, of course with Keller Williams here in my home office, the kids' art room. Let's take a look at this last week in real estate. Obviously, in these times, the real estate industry with the Coronavirus, the volatility and the stock market, things are changing and I just want to send you a video to keep you on the pulse. The reason I'm doing a weekly video is because the feelings of real estate change on a daily basis. So if we can look at things from a weekly standpoint, we can look at some data, we can go back and see how things are changing. I can give you an idea of what's happening with our clients and then also give you a full market update. So let's take a look at some of the changes.
Number one, no more open houses. The National Association of Realtors put a kibosh on open houses. So we are not doing open houses at least anymore for the foreseeable future. I think that makes sense with the social distancing. It is one tool that we have to sell houses. It's not the only tool that we use. So it's probably not the end of the world and you will see why. As far as the number of showings, I think this is a really good indicator of what's going on. So in the Twin Cities over the last seven days, there have been 15000 individual scheduled showings, 15000. So there are still a lot of people going out looking at real estate. Now that is down. The previous week there was about 19000 showings.
By the way, I'm using data between the 2 and 400000 price range. So I'm just picking a number. So when I say 15000 that's just in that price range. And yet you can see that there are people out in the median price range, looking at real estate right now. Last week I talked about listings being down and that we had 8000 listings in the market and we had room for another 3000 if not more. We had room for a lot more listings. And guess what? Over the last week, we listed 2600 homes in the Twin Cities. Now with that, 1700 came off the market. So there is a net positive of about 900 more listings. So that's a good thing. There are more people that are putting homes in the market so that there are more options for buyers to choose from. We still have room. There is still room to grow. So in the event that we see a market shift and more people put their homes in the market, at least for now, there is still room.
Now how about how it's affecting business in general? There are a couple of things I wanted to talk about. Number one, closings. Closings are changing. Now we have, you show up to a closing table, you are generally by yourself or your spouse or your partner. There is one pen that's given to you. You get to take that pen home with you. Before you show up, the tables are cleaned. There are no cookies anymore. There are no pens on the table. There are no glasses on the table. There is nothing for you to touch. You get up, you leave, the table gets sanitized and the chairs get sanitized.
Title companies are taking it very seriously and so people are acting different with closing. So many of our clients are actually asking if we can just send them the documents and they can sign it and send them back. Unfortunately, we still need to have a notary notarize the documents for closing, so we can't just send them back and forth in the mail. We do actually need to have a notary in place. We could have, if you have a notary like a neighbor or something like that or a family member, we certainly could do something like that, but that is one of the things that you will see is changing.
As far as our listings and our buyers, we are making a couple of recommendations. For everybody that has a home that's going to be active on the market, when we have showing scheduled, we advise you to leave all the lights on in the home, leave all the interior doors wide open, and then when you get home from your showings, you can be the one to shut the doors and turn off the lights, because we are asking the agents, the realtors not to touch anything. We are asking their buyers not to touch anything when they are walking through the home. We are also asking obviously, any buyers that believe that they have been exposed to COVID19 that they are not showing homes. So for buyers and sellers, both we are advising, let's have all the doors open, let's have all the lights on and let's limit the amount of contact that we have to the home. It's something that we are taking very seriously as far as the social distancing and trying to do our part to help slow the spread of this virus.
There is one big question mark with the real estate industry and that it's always the same question mark for me and it doesn't matter really what's going on. The question mark is always the same. The problem right now is that question mark is heightened and it's larger than it normally is because of the crisis going on. That question Mark is housing affordability. It’s something that we very rarely ever talk about because the metrics are multi-varied. In other words, if you see home prices going up or home prices going down, that's a single variable, home prices.
What causes home prices to go up would be a multitude of variables. For example, interest rates would be an example. The job market would be an example. How much money is being put into the stock market and the bond market would be an example of where people are putting their money. The volatility in ourselves would be an example. The foreclosure rate is an example. So there is a multitude of variables that would determine whether home prices are going to go up or home prices are going to go down. There are three primary factors in regards to what's called affordability. Right now we have a very affordable market. Interest rates are still relatively low. Home prices are still relatively low. Even though home prices have been going up, it's relatively low. We are below the 4% national average over last four years. We are below that 4%. Some would argue that home prices are actually still undervalued.
There are three things that directly affect affordability. Number one is interest rates. Interest rates have been bouncing up and down every single day during the day like a basketball. Normally this happens, but it bounces up and down like an eighth of a percent. Over the last week and a half or so, it has been bouncing up and down upwards of 1%. We actually saw the interest rates get as high as 5% and that was like two days after they were three and a quarter. And so interest rates are really just boom, boom, boom boom. Right now it sounds like they have settled and calmed and they are back down to like the mid threes, which is a very acceptable interest rate. We actually had a client who was quoted a four and a half interest rate lock in at I think three and a half or three and three quarters, something like that, so that's really good news. But interest rates affect our ability to afford a home.
The second thing is the job market. That's the biggest question mark of all. Right now we've had some clients lose their job. We've had some buyers on the other side of a listing communicate with us that they have COVID 19. The job market is the biggest question mark of all, which of course, if people don't have a job, then they can't pay their mortgage. It doesn't matter what the interest rates are.
The third thing then would of course, be the price. So those three things, interest rates, job market and home prices, that affects our ability to pay. It affects our affordability of the home that we are buying. Those are the three factors that we are looking at fairly closely. It looks like interest rates are volatile and yet still where we kind of would expect them to be. It looks like the job market is volatile, but it's not like we have mass layoffs across the country. So that's something that we are going to continue to watch. And then home prices of course, are still moving up because the inventory is low. If we continue to have 15000 showings over two price ranges, 200 to 400000, we will continue to see demand and things like that.
I hope this is a helpful video. If there is a question that you have that you would like me to answer in a video, just shoot me an email back. I would love your feedback too if this video is helpful. Again, we are doing this on a weekly basis for our clients and then we are posting it on social media so people are aware of what's going on in the market. Again, this is Travis Anderson with Keller Williams. Thanks for your time.