On a daily basis, when I run into people, their first question is “how is the family?” followed by “how is the real estate market?” I kindly share that we are presently in a seller’s market, whereby the low inventory of homes has created a basic economic principle of supply and demand.
Presently there are 35 resale homes available for sale in Tracy and an abundance of buyers who are “pulling out all the stops” to purchase one of those homes. As it relates to brand new homes, once again, the number of buyers exceeds the number of homes available to purchase. The waiting lists for new homes are quite extensive. So, what is the possible forecast for 2021?
The good news is that the economy is starting to heal, where we had a good start to the beginning of the year, interest rates are at an all-time low, consumers are feeling better about the economy. And according to data tracked by John Hopkins University, about 40% of Americans have received at least one COVID-19 shot and roughly 1 in 4 are fully vaccinated.
The bad news is we still have a large learning curve to navigate, the low inventory of homes can continue to inflate the price of homes making it even more difficult for first time homebuyers to compete and COVID protocols still need to be followed even though vaccines are being administered.
According to Jordan Levine, Vice President and Chief Economist for the California Association of Realtors, he optimistically reported that he does not anticipate homes foreclosing like what occurred in 2008-2010. Even though homes are appreciating at a double-digit growth of 20% like homes in 2008-2010, homes today have equity. A homeowner statistically will not let their home foreclose with equity. Mr. Levine shared that less than 5% of homes could possibly be headed towards foreclosure when the market settles down.
Some additional nuggets of market wisdom that were shared, included that rates could possibly go to 4.5% - which is still an incredible rate - only 27% of the State of California can afford to purchase a home and 260,000 people left California in 2020, demonstrating for the first time in three decades a reduction in California’s population.
Bottom Line: The market still looks bright for the remainder of the year. However, I have always been a fan of the statement of being “cautiously optimistic.” I always love quoting my dear mother, “too much of a good thing is never good.” We can continue to be optimistic, but we need to be realistic.
• Donna A. Baker, CRS ABR SFR CDPE is the Broker-Owner of At Home Real Estate Group selling real estate for 21 years. Her memberships include National Association of Realtors, California Association of Realtors, Certified Residential Specialists, Central Valley Association of Realtors, Accredited Buyer's Representative, Certified Distressed Property Expert®, and Short Sales and Foreclosure Resource. In addition, Donna teaches monthly at the Central Valley Association of Realtors New Realtor Member Orientation and serves as the Chairman for the Tracy Real Estate Marketing Council and as a Board member for the McHenry House a local rehab shelter.
Donna has lived in Tracy since 1989 with her patient husband Tom of 32 years and has two awesome children, Trevor and Ally. Contact her at firstname.lastname@example.org.