What Might the Rest of 2020 Look Like?

What Are Experts Saying About the Rest of 2020? | MyKCM

Let’s be real one of the major items on everyone’s mind these days is: What’s going to happen to the housing market in the second half of the year? If we look at recent data on the economy, unemployment, real estate, and more, many factors economists are now revising their forecasts for the remainder of 2020 – and the outlook is extremely encouraging. Here’s  what some experts have to say about key areas that will power the industry and the economy forward this year.

Mortgage Purchase Originations: Joel Kan, Associate Vice President of Economic and Industry ForecastingMortgage Bankers Association

“The recovery in housing is happening faster than expected. We anticipated a drop off in Q3. But, we don’t think that’s the case anymore. We revised our Q3 numbers higher. Before, we predicted a 2 percent decline in purchase originations in 2020, now we think there will be 2 percent growth this year.”

Home Sales: Lawrence Yun, Chief Economist, National Association of Realtors

“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lock down and hence the cyclical low point…Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.”

Inventory: George Ratiu, Senior Economist, realtor.com

“We can project that the next few months will see a slow-yet-steady improvement in new inventory…we projected a stepped improvement for the May through August months, followed by a return to historical trend for the September through December time frame.”

Mortgage Rates: Freddie Mac

“Going forward, we forecast the 30-year fixed-rate mortgage to remain low, falling to a yearly average of 3.4% in 2020 and 3.2% in 2021.”

New Construction: Doug Duncan, Chief Economist, Fannie Mae

“The weaker-than-expected single-family starts number may be a matter of timing, as single-family permits jumped by a stronger 11.9 percent. In addition, the number of authorized single-family units not yet started rose 5.4 percent to the second-highest level since 2008. This suggests that a significant acceleration in new construction will likely occur.”

Good news is that the experts are optimistic about the second half of the year. If you made the choice to pause your 2020 real estate plans in the spring, now may be the right time for you to get back into the market.  If you have questions I’m here to talk to you about it, no pressure, no tactics just the advice and guidance you need to make the best decision possible for your family.

Hillsboro Schools Foundation – Helping Hillsboro Students

tim-mossholder-WE_Kv_ZB1l0-unsplashWhen I was obtaining my Bachelors in Educational Studies I realized that the way we fund schools is broken.  We rely on property taxes which is not stable funding, especially in uncertain times.  Therefore as we move into the next school year and beyond we are going to find that school districts will be asked to cut their budgets due to a funding shortfall at the state and local level.  In an effort to help enrich schools through private funds, the Hillsboro Schools Foundation works to help fill the void.

Since 2001, the Hillsboro Schools Foundation has invested nearly $4 million in Hillsboro Schools for Innovative Grants, Homework Clubs, funding for Science, Technology, Engineering and Math and so much more.  In addition with students moving to online school this spring they have been working to help provide support for innovative programs, and make certain that at risk students continue to receive the help that they need.

While they help out all of the schools in the Hillsboro School District through their grants here are some of the most recent that grants that were issued to schools my children attended:

Glencoe High School –

  • 2018-19 GHS in search of GMOs
  • 2016-17 Real Time Spectroscopy
  • 2014-15 Chromebooks

Evergreen Middle School –

  • 2018-19 Club Connections
  • 2016-17 Coloring Connections
  • 2016-17 Evergreen Comicon
  • 2013-14 STEM Lab

North Plains Elementary School –

  • 2017-18 Amplify STEM Kits
  • 2016-17 Literacy Center ‘Cookie Swap’
  • 2011-12 Computers on Wheels

Many of the items would not be possible without the help of the grants provided by the Foundation.  Unfortunately until a better solution is found to fund school districts foundations like Hillsboro Schools Foundation are going to help provide much needed items for schools.  If you would like to help the Hillsboro Schools Foundation you can make a donation here:  https://interland3.donorperfect.net/weblink/WebLink.aspx?name=E10908&id=1

Are There Indications that the Housing Market Will Turn Around This Year?

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I am have more and more people asking me if I believe that now is the time for them to be thinking about  buying or selling a home in 2020.  With everything going on some folks have made the decision to shift their plans or to completely put them on hold for the time being. them on hold for the next few months.  The buyers and sellers I talk to are wondering and worry that the market is going to change, and they are also concerned about the  economy  and when it will turn around. If you are like millions of others out there who are trying to figure out what’s going to happen here is some information that could shed some light on the market for you.

The spring 2020 NAR Flash Survey: Economic Pulse, from the National Association of Realtors (NAR) has been tracking behavior changes of homebuyers and sellers. In response to their most recent survey Lawrence Yun, the Chief Economist at NAR, noted it shows the beginnings of a turn in the market:

“After a pause, home sellers are gearing up to list their properties with the reopening of the economy…Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly payments into future years.”

What does the survey indicate about sellers?

It indicates that sellers are positioning themselves to make moves this year. More than 3 in 4 potential sellers say that they are getting ready to sell their homes once stay-at-home orders are lifted and they feel more confident.  This  means more homes will start to be available for interested buyers.Will the Housing Market Turn Around This Year? | MyKCMJust this week, Zillow also reported an uptick in listings and this is great news for the health of the market:

“The number of new for-sale listings overall has shown improvement, up 5.9% last week from the previous week. New listings of the most-expensive homes…are now seeing the biggest resurgence, up 8%. The uptick is likely a sign sellers are feeling more confident because of improving buyer demand, as newly pending sales have also jumped up during the same period.”

What does the survey say about buyers?

The pandemic has made an impact on buyer preferences regarding showings:

  • 5% of the respondents said buyers are shifting their focus from urban to suburban areas.
  • 1 in 8 Realtors report changes in desired home features, with home offices, bigger yards, and more space for their families becoming increasingly important.
  • Only 17% said buyers stopped looking due to concerns about their employment or loss of a job.

As I’ve stated before, buyer demand is strong right now.  Yes there are those who are waiting for more inventory to become available before they make their move, but we are still seeing buyers making offers.

So, if you are looking to put your home on the market let’s chat.  I promise, no pressure or sales tactics, just the guidance you need right now.  Plus, there’s a good chance an eager buyer is looking for a home just like yours.

Home Equity…..it’s a Bright Spark in the Housing Market

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We have seen more unemployment claims than ever before over the past several weeks and let’s be real fear is spreading widely. There is some good news, however, more than 4 million initial unemployment filers have likely already found a new job,  as industries such as health care, food and grocery stores, retail, delivery, and more increase their employment opportunities. So, let’s break down what unemployment means for homeownership, and start to understand how the significant equity Americans hold today, are important parts of seeing the picture clearly when sorting through this uncertainty.

One of the biggest questions right now is whether this historic unemployment rate will initiate a new surge of foreclosures in the market. Given that the Great Recession of 2008 is still fresh in many peoples minds this is a very real fear. Despite the staggering number of claims, there are actually many reasons why we won’t see a significant number of foreclosures like we did during the housing crash twelve years ago. Why?  Well, the amount of equity homeowners have today is a leading differentiator in the current market.

According to John Burns Consulting58.7% of homes in the U.S. have at least 60% equity. That number is drastically different than it was in 2008 when the housing bubble burst. The last recession was painful, and when prices dipped, many found themselves owing more on their mortgage than what their homes were worth causing homeowners simply walked away at that point. Currently, 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear. Those homes are not at risk for foreclosure (see graph below):Why Home Equity is a Bright Spark in the Housing Market | MyKCMIn addition, CoreLogic notes the average equity mortgaged homes have today is $177,000. That’s a significant amount that homeowners won’t be stepping away from, even in today’s economy (see chart below):Why Home Equity is a Bright Spark in the Housing Market | MyKCMIn essence, the amount of equity homeowners have today positions them to be in a much better place than they were in 2008.  The fear and uncertainty that we are feeling right now is very real, and this is not going to be an easy road we go down.  However, seeing strength in our current market through homeowner equity that was not there in the past is a bright spark to help us make it through this difficult time.

Is there Hope on the Horizon for Unemployment?

the-new-york-public-library-9ZpOvzm9vJc-unsplashWell, the markets are once again waiting for tomorrows unemployment rate for April 2020 that will be released by the U.S. Bureau of Labor Statistics. It will hit a peak this country has never seen before (which can be scary given we keep hearing people talk about unemployment rates that rival the Great Depression), with data representing real families and lives affected by this economic slowdown. The numbers are going to be alarming to us. The media headlines will present a doomsday scenario.  However, there is hope that as businesses reopen, most people will become employed again soon.

Last month’s report indicated we initially lost over 700,000 jobs and the unemployment rate quickly rose to 4.4%. With the release of the new data, that number will climb even higher. Experts forecast this report will show somewhere between a 15% – 20% national unemployment rate, and some anticipate that number to be even greater (see graph below):Unemployment: Hope on the Horizon | MyKCM

So, what’s happened over the last several weeks? 

Here’s a breakdown of what this spring’s weekly unemployment filings have looked like:Unemployment: Hope on the Horizon | MyKCMThe good news shown in the above graph indicates the number of additional unemployment claims has decreased week over week since the beginning of April. Carlos Rodriguez, CEO of Automatic Data Processing (ADP) says based on what he’s seeing:

“It’s possible that companies are already anticipating some kind of normalization, opening in certain states and starting to post jobs.” 

He goes on to say that this doesn’t mean all companies are hiring, but it could mean they are at the point where they’re not cutting jobs anymore. Let’s hope this trend continues.

Everyone wants to know what will the future bring?

Many experts predict that while our unemployment is high right now, it won’t be that way for long. The length of unemployment during this crisis is projected to be significantly shorter than the duration seen in the Great Recession and the Great Depression.Unemployment: Hope on the Horizon | MyKCMSo, while forecasts may be high, the numbers are trending down and the length of time isn’t expected to last forever.

I know it isn’t easy, however don’t let the headlines rattle you.  There is light at the end of the tunnel as we begin to safely reopen businesses throughout the country.  The truth is unemployment affects our families, our businesses and our country, however it is important to rally around those impacted and do our part to support them through this tough time.