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Recession? Yes. Housing Crash? No.

Monday, April 13, 2020
by Christie Cannon

Recession? Yes. Housing Crash? No.

Recession? Yes. Housing Crash? No. | MyKCM
 

With over 90% of Americans now under a shelter-in-place order, many experts are warning that the American economy is heading toward a recession, if it’s not in one already. What does that mean to the residential real estate market?

What is a recession?

According to the National Bureau of Economic Research:

“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”

COVID-19 hit the pause button on the American economy in the middle of March. Goldman Sachs, JP Morgan, and Morgan Stanley are all calling for a deep dive in the economy in the second quarter of this year. Though we may not yet be in a recession by the technical definition of the word today, most believe history will show we were in one from April to June.

Does that mean we’re headed for another housing crash?

Many fear a recession will mean a repeat of the housing crash that occurred during the Great Recession of 2006-2008. The past, however, shows us that most recessions do not adversely impact home values. Doug Brien, CEO of Mynd Property Management, explains:

“With the exception of two recessions, the Great Recession from 2007-2009, & the Gulf War recession from 1990-1991, no other recessions have impacted the U.S. housing market, according to Freddie Mac Home Price Index data collected from 1975 to 2018.”

CoreLogic, in a second study of the last five recessions, found the same. Here’s a graph of their findings:Recession? Yes. Housing Crash? No. | MyKCM

What are the experts saying this time?

This is what three economic leaders are saying about the housing connection to this recession:

Robert Dietz, Chief Economist with NAHB

“The housing sector enters this recession underbuilt rather than overbuilt…That means as the economy rebounds - which it will at some stage - housing is set to help lead the way out.”

Ali Wolf, Chief Economist with Meyers Research

“Last time housing led the recession…This time it’s poised to bring us out. This is the Great Recession for leisure, hospitality, trade and transportation in that this recession will feel as bad as the Great Recession did to housing.”

John Burns, founder of John Burns Consulting, also revealed that his firm’s research concluded that recessions caused by a pandemic usually do not significantly impact home values:

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

Bottom Line

If we’re not in a recession yet, we’re about to be in one. This time, however, housing will be the sector that leads the economic recovery.

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D-FW’s Home Market Ranked Among Least At Risk From COVID-19

Wednesday, April 8, 2020
by Christie Cannon
A new study identifies the most vulnerable home markets to be affected by the pandemic. Most major Texas metro areas are not expected to be affected as much as other areas, especially in the northeast and in Florida.
A new study identifies the most vulnerable home markets to be affected by the pandemic. Most major Texas metro areas are not expected to be affected as much as other areas, especially in the northeast and in Florida.(Vernon Bryant / Staff Photographer)

Texas’ biggest markets — including Dallas-Fort Worth — are among the metro areas least likely to see a major housing market shakeout from the pandemic.

Housing markets that will be most negatively affected by the COVID-19 infections and resulting economic recession are mostly in the Northeast and Florida, according to a new report by analysts at Attom Data Solutions.

Researchers looked at almost 500 home markets around the country and rated them based on foreclosures, homeowner equity, wages and other factors.

“It’s too early to tell how much effect the coronavirus fallout will have on different housing markets around the country. But the impact is likely to be significant from region to region and county to county,” Attom Data’s Todd Teta said in the just-released report. “What we’ve done is spotlight areas that appear to be more or less at risk based on several important factors.

“From that analysis, it looks like the Northeast is more at risk than other areas,” he said. “As we head into the spring homebuying season, the next few months will reveal how severe the impact will be.”

Attom Data estimates the major housing markets most at risk from the virus include four in New Jersey and the New York area, three in Connecticut and 10 from Florida. Only one was in California, and none were located in other West Coast states.

“Texas has 10 of the 50 least vulnerable counties from among the 483 included in the report, followed by Wisconsin with seven and Colorado with five,” Attom Data analysts said. “The 10 counties in Texas include three in the Dallas-Fort Worth metro area (Dallas, Collin and Tarrant counties).

Harris County in the Houston area and Travis County in the Austin area were also ranked low for coronavirus-related housing shakeouts.

The pandemic and shelter-in-place orders are already affecting North Texas’ housing markets because there are fewer home shoppers in the market at a time of year when home sales typically boom.

And the Dallas-Fort Worth area was one of the few major metros in the country that saw a decline in the median list prices of homes listed for sale in March — they were down 3% from a year ago, according to Realtor.com

Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University, said he’s seen forecasts that predict Texas’ home markets will fare better coming out of the pandemic. But he’s wary of making any predictions.

“Obviously, the New York market will be collapsed and the tourist areas,” Gaines said. “Beyond that, we simply flat don’t know.

“The hit of the virus here in Texas so far has been considered light compared to other areas of the country.”

Gaines said it will be several months before sales and pricing numbers show where the Texas home markets land.

 

“I’ve seen some preliminary March numbers that indicate that we have had a slowdown but not a collapse,” he said. “But going forward, it’s going to look really bad year-over-year.

“March, April, May, June and July are usually our hot housing months.”

Texas markets are expected to outperform.
Texas markets are expected to outperform.(Attom Data Solutions.)

Steve Brown, Real Estate Editor. Steve covers commercial and residential real estate in Dallas-Fort Worth.

 

 

Article Provided By: Steve Brown at Dallas Morning News

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Meet Cami Branson - Listing Specialist

Monday, April 6, 2020
by Christie Cannon

Every Monday, meet one of our amazing Team Members!  Today we welcome you to meet Cami Branson, a listing specialist with our Team!

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The Housing Market Is Positioned to Help the Economy Recover

Friday, April 3, 2020
by Christie Cannon

The Housing Market Is Positioned to Help the Economy Recover 

The Housing Market Is Positioned to Help the Economy Recover [INFOGRAPHIC] | MyKCM
 

Some Highlights

  • Expert insights are painting a bright future for housing when the economy bounces back – and it will.
  • We may be facing challenging economic times today, but the housing market is poised to help the economy recover, not drag it down.
  • Let’s connect to make sure you’re informed and ready when it’s time to make your move.
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The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

Thursday, April 2, 2020
by Christie Cannon

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year | MyKCM
 

The last few weeks and months have caused a major health crisis throughout the world, leading to a pause in the U.S. economy as businesses and consumers work to slow the spread of the coronavirus. The rapid spread of the virus has been compared to prior pandemics and outbreaks not seen in many years. It also has consumers remembering the economic slowdown of 2008 that was caused by a housing crash. This economic slowdown, however, is very different from 2008.

One thing the experts are saying is that while we’ll see a swift decline in economic activity in the second quarter, we’ll begin a sharp rebound in the second half of this year. According to 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.” 

Given this situation, if you’re thinking about buying a home this year, the best thing you can do right now is use this time to get pre-approved for a mortgage, which you can do from the comfort of your home. Pre-approval will help you better understand how much you can afford so that you can confidently do the following two things when you’re ready to buy:

1. Gain a Competitive Advantage

Today’s low inventory, like we’ve seen recently and will continue to see, means homebuyers need every advantage they can get to make a strong offer and close the deal. Being pre-approved shows the sellers you’re serious about buying a home, which is always a plus in your corner.

2. Accelerate the Homebuying Process

Pre-approval can also speed-up the homebuying process so you can move faster when you’re ready to make an offer. Being ready to put your best foot forward when the time comes may be the leg-up you need to cross the finish line first and land the home of your dreams.

Bottom Line

Pre-approval is the best thing you can do right now to be in a stronger position to buy a home when you’re ready. Let’s connect today to get the process started.

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Is Now a Good Time to Refinance My Home?

Tuesday, March 31, 2020
by Christie Cannon

Is Now a Good Time to Refinance My Home?

Is Now a Good Time to Refinance My Home? | MyKCM
 

With interest rates hitting all-time lows over the past few weeks, many homeowners are opting to refinance. To decide if refinancing your home is the best option for you and your family, start by asking yourself these questions:

Why do you want to refinance?

There are many reasons to refinance, but here are three of the most common ones:

1. Lower Your Interest Rate and Payment: This is the most popular reason. Is your current interest rate higher than what’s available today? If so, it might be worth seeing if you can take advantage of the current lower rates.

2. Shorten the Term of Your Loan: If you have a 30-year loan, it may be advantageous to change it to a 15 or 20-year loan to pay off your mortgage sooner rather than later.

3. Cash-Out Refinance: You might have enough equity to cash out and invest in something else, like your children’s education, a business venture, an investment property, or simply to increase your cash reserve.

Once you know why you might want to refinance, ask yourself the next question:

How much is it going to cost?

There are fees and closing costs involved in refinancing, and The Lenders Network explains:

“As an example, let’s say your mortgage has a balance of $200,000. If you were to refinance that loan into a new loan, total closing costs would run between 2%-4% of the loan amount. You can expect to pay between $4,000 to $8,000 to refinance this loan.”

They also explain that there are options for no-cost refinance loans, but be on the lookout:

“A no-cost refinance loan is when the lender pays the closing costs for the borrower. However, you should be aware that the lender makes up this money from other aspects of the mortgage. Usually charging a slightly higher interest rate so they can make the money back.”

Keep in mind that, given the current market conditions and how favorable they are for refinancing, it can take a little longer to execute the process today. This is because many other homeowners are going this route as well. As Todd Teta, Chief Officer at ATTOM Data Solutions notes about recent mortgage activity:  

“Refinancing largely drove the trend, with more than twice as many homeowners trading in higher-interest mortgages for cheaper ones than in the same period of 2018.”

Clearly, refinancing has been on the rise lately. If you’re comfortable with the up-front cost and a potential waiting period due to the high volume of requests, then ask yourself one more question:

Is it worth it? 

To answer this one, do the math. Will it help you save money? How much longer do you need to own your home to break even? Will your current home meet your needs down the road? If you plan to stay for a few years, then maybe refinancing is your best move.

If, however, your current home doesn’t fulfill your needs for the next few years, you might want to consider using your equity for a down payment on a new home instead. You’ll still get a lower interest rate than the one you have on your current house, and with the equity you’ve already built, you can finally purchase the home you’ve been waiting for.

Bottom Line

Today, more than ever, it’s important to start working with a trusted real estate advisor. Whether you connect by phone or video chat, a real estate professional can help you understand how to safely navigate the housing market so that you can prioritize the health of your family without having to bring your plans to a standstill. Whether you’re looking to refinance, buy, or sell, a trusted advisor knows the best protocol as well as the optimal resources and lenders to help you through the process in this fast-paced world that’s changing every day.

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What You Can Do to Keep Your Dream of Homeownership Moving Forward

Friday, March 27, 2020
by Christie Cannon

What You Can Do to Keep Your Dream of Homeownership Moving Forward 

What You Can Do to Keep Your Dream of Homeownership Moving Forward [INFOGRAPHIC] | MyKCM
 

Some Highlights:

  • Don’t put your homeownership plans on hold just because you’re stuck inside.
  • There are several things you can do right now to keep your home search moving forward.
  • Connect with an agent, learn about resource programs for things like down payments, and get pre-approved today.
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We Are Still Here For You!

Wednesday, March 25, 2020
by Christie Cannon

Our team is still dedicated to serving our community especially in this time of need!

The Christie Cannon Team

972-215-7747

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Buying and Selling Virtually

Monday, March 23, 2020
by Christie Cannon

Did you know that at The Christie Cannon Team we are able to do buyer and seller appointments virtually?  Yes!  Without even leaving the comfort of your own home we can schedule and do a complete consult over the phone, face-time or zoom!

Even better?

We can even virtually tour homes for you!  Just because we are in a social distancing period doesn't mean you have to up your plans for your dream home on hold!  We are here to help!  Just let an agent know which homes you are wanting to see, If we do not already have a virtual tour of the home we will do our best to get one for you!

Are you ready to buy or sell a home?  Don't know where to start?  Don't stress!  Contact us today and let us know how we can help you!

The Christie Cannon Team

972-215-7747

 


 

 

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3 Reasons Why This Is Not a Housing Crisis!

Friday, March 20, 2020
by Christie Cannon

Three Reasons Why This Is Not a Housing Crisis

Three Reasons Why This Is Not a Housing Crisis | MyKCM
 

In times of uncertainty, one of the best things we can do to ease our fears is to educate ourselves with research, facts, and data. Digging into past experiences by reviewing historical trends and understanding the peaks and valleys of what’s come before us is one of the many ways we can confidently evaluate any situation. With concerns of a global recession on everyone’s minds today, it’s important to take an objective look at what has transpired over the years and how the housing market has successfully weathered these storms.

1. The Market Today Is Vastly Different from 2008

We all remember 2008. This is not 2008. Today’s market conditions are far from the time when housing was a key factor that triggered a recession. From easy-to-access mortgages to skyrocketing home price appreciation, a surplus of inventory, excessive equity-tapping, and more – we’re not where we were 12 years ago. None of those factors are in play today. Rest assured, housing is not a catalyst that could spiral us back to that time or place.

According to Danielle Hale, Chief Economist at Realtor.com, if there is a recession:

"It will be different than the Great Recession. Things unraveled pretty quickly, and then the recovery was pretty slow. I would expect this to be milder. There's no dysfunction in the banking system, we don't have many households who are overleveraged with their mortgage payments and are potentially in trouble."

In addition, the Goldman Sachs GDP Forecast released this week indicates that although there is no growth anticipated immediately, gains are forecasted heading into the second half of this year and getting even stronger in early 2021.Three Reasons Why This Is Not a Housing Crisis | MyKCMBoth of these expert sources indicate this is a momentary event in time, not a collapse of the financial industry. It is a drop that will rebound quickly, a stark difference to the crash of 2008 that failed to get back to a sense of normal for almost four years. Although it poses plenty of near-term financial challenges, a potential recession this year is not a repeat of the long-term housing market crash we remember all too well.

2. A Recession Does Not Equal a Housing Crisis

Next, take a look at the past five recessions in U.S. history. Home values actually appreciated in three of them. It is true that they sank by almost 20% during the last recession, but as we’ve identified above, 2008 presented different circumstances. In the four previous recessions, home values depreciated only once (by less than 2%). In the other three, residential real estate values increased by 3.5%, 6.1%, and 6.6% (see below):Three Reasons Why This Is Not a Housing Crisis | MyKCM

3. We Can Be Confident About What We Know

Concerns about the global impact COVID-19 will have on the economy are real. And they’re scary, as the health and wellness of our friends, families, and loved ones are high on everyone’s emotional radar.

According to Bloomberg,

“Several economists made clear that the extent of the economic wreckage will depend on factors such as how long the virus lasts, whether governments will loosen fiscal policy enough and can markets avoid freezing up.”

That said, we can be confident that, while we don’t know the exact impact the virus will have on the housing market, we do know that housing isn’t the driver.

The reasons we move – marriage, children, job changes, retirement, etc. – are steadfast parts of life. As noted in a recent piece in the New York Times, “Everyone needs someplace to live.” That won’t change.

Bottom Line

Concerns about a recession are real, but housing isn’t the driver. If you have questions about what it means for your family’s homebuying or selling plans, let’s connect to discuss your needs.

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Christie Cannon
Keller Williams Realty
5933 Preston Road #300
Frisco TX 75034
972-215-7747
Fax: 972-215-7748
Send an Email
Keller Williams Frisco - The Christie Cannon Team - http://www.christiecannon.com

 

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