May 2020 – Monthly Market Update

As the state has been shutdown through the month of April, many people were expecting our NWA Real Estate Market to suffer during this pandemic. While we did see a few weeks of lower activity, as you’ll see our market has remained steady and is even breaking records for Average Sale Prices right now. Check it out below!

Supply: Inventory Levels

First of all, our NWA Real Estate market continued it’s strong momentum through April. Our April numbers for homes on the market across Benton and Washington counties totaled 3,609. That is the lowest inventory level for this month since the April of 2014. Plus, we closed 896 sales, which gives us a Month’s Supply of 4.05. This is the lowest Month’s Supply metric for an April since 2013. That means that despite the disruption that struck mid-March, April was a continuation of our Seller’s Market, and even despite the broader economic issues we have low supply for the current demand. See the chart below.

Since there’s so much uncertainty in the world right now, and because Real Estate has such a long settlement period, I’ve been watching “Early Indicator” data points starting in the first week of March. See below.

We clearly saw a drop in both New Listings and Pending Sales from Mid-March through Mid-April. But by the beginning of May, we had a 26.81% Jump in New Lisitings compared to the 1st week of April, also a 8.76% rise compared to the week before, which is only -5.70% below the same week last year (beginning of May 2019).

So, it seems our numbers of Listings is on the rise, back to a normal level. Interestingly, the Pending Listings are following almost the exact same trajectory, which is actually a good sign. That means supply and demand are remaining even for the time being. At the moment, this doesn’t point to a drop in prices.

In fact, we’ve had 45.28% fewer Price Reductions Year-over-Year for the first week of May. And even week to week, we’re not seeing too many sellers dropping prices. For now, these prices are holding.

Demand: Mortgages and Jobs

Now typically, the numbers above would actually lead to higher prices, since we’re actually seeing a lower supply. If demand remains strong, we will undoubtedly see home prices rise more. But that’s the key word: “If.”

Because if demand falls dramatically faster than the supply, we could still have prices trending downward.

If people aren’t employed, they typically can’t buy houses. So, the Jobs Numbers are the big factor to watch over the next several months. And right now they don’t look good.

At the highest of levels of unemployment following the 2008 financial crisis, there were 15.3 million jobless Americans. But in the past five weeks a staggering 26.5 million workers have already filed jobless claims… There were already 7.1 million unemployed Americans as of March 13, according to the U.S. Bureau of Labor Statistics. When the figures are combined, it would equal more than 33 million unemployed, or a real unemployment rate of 20.6%—which would be the highest level since 1934.

Fortune.com

Arkansas is trying to re-open this month, so we’ll see how quickly we can get everyone back to work. But there are many businesses moving into bankruptcies, restructuring, and laying off workers right now. Not all of these employees will have a place to go back to.

If this economic impact continues, I do see a massive disruption to the Real Estate market. The key factor in all of this is how quickly people can get back to work, and how many of our local businesses can survive this historic shutdown.

I’m not an economist, or a financial planner, but there do seem to be some dark days ahead for many, many people in our nation and our state. There are concerns about the stock market, the amount of debt we all have, and even the potential weakening of our currency through inflation. Many financial experts are bracing for a hard impact to our economy. Even Ray Dalio is claiming we are entering a Depression, which will take years to climb out of. (Video of his Ted Talk here.)

However, as your Real Estate professional, I may be able to give you some good news if you’ve been wanting to sell your home this year. Stay with me to the end of this article.

Average Sale Price and Days on Market

APRIL 2020 BROUGHT A NEW RECORD!!!

Our Residential Market rose to an Average Sale Price of $274,540, across Washington and Benton Counties. That’s the highest on record.

Average Days on Market came in at 100, which matched last month’s 101 DOM almost exactly.

What it all Means for You

If you’ve been thinking of selling your home, PLEASE listen to me. We may be close to a price peak right now. We don’t know exactly how all this will play out. Hopefully, our prices can withstand the economic storm that has been brewing because of the pandemic.

However, that may not be the case, and we may see prices fall later this year. You may not be able to sell your home at these kinds of prices if you miss this window of opportunity.

If we do see a price decline in Real Estate, there’s no telling how long it may take to recover. This decline won’t look exactly like the last Recession, but there are lessons to be learned from it. In that one, it took Real Estate 7 to 8 years to get back to the previous highs.

Are you prepared to stay in your current home for the next 7-10 years? If not, let’s chat.

Don’t misunderstand me, I hope I’m wrong, but it looks like a shift could be on the horizon, and I want you to make it through in the best possible position.

I book Free Strategy Sessions for all my clients. No pressure or obligation, but I’d be happy to help you put a solid plan in place to get you into the home you’ve been dreaming of.

Would it make sense to chat for a few minutes?

Just book a FREE Strategy Session with me Here to block out your own time on my calendar.

You could also Send me a message or give me a call today! (479) 777-3379

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Number of Monthly Sales by Zip Code

Median Sale Price by Zip Code