The market from January through May 31, 2021

Public Open Houses, Re-opening the Economy and a Return to Normal

 It is now official; on June 15^th, the clouds will part, the sun will shine again, the birds will be singing and the State will fully reopen.  In the meantime, we were given sudden notice mid-May that all Public Open Houses could immediately resume with certain modifications.  As suddenly as the Shelter In-Place orders took effect last year, the plans for reopening California are moving with equal speed.  Within a few days, all modifications necessary to hold a Public Open House were clarified except one; how many people would be allowed in at any one time.  At the time of writing this, we are in our third weekend of open houses and we do not have clarification of how we determine the number of people allowed in at any one time.  Our Orange Tier allows a maximum of 25% occupancy not to exceed 25 people.  But we have no idea how to determine that.  What is 25% occupancy of an 1100 square foot home versus a 4000 square foot home?  If the maximum “normal” occupancy of a 2 bedroom, 1 bathroom home is typically 4 people, then is maximum occupancy during a public open house 1 person? 

        We created a list of guidelines that was designed to give our Agents and Clients some guidance around safety and adhering to the required modifications, which are numerous.  But the good news is Open Houses have been successful.  Everyone coming to the Open Houses have been following all the rules without exception and they have given Buyers in the market greater flexibility for in-person viewings of homes.  In fact, we have had numerous reports that potential Buyers were making offers on homes as a direct result of the Open House and several received offers because of the showings.  It is good to have this method of marketing available to us again!

So What Happens After June 15?

Well now, that is a really good question.  Presumably, after June 15, there may be fewer or no modifications.  Right or wrong, I am assuming that the mask mandate will still be in place, but that physical distancing requirements will be lifted.  I imagine that our colored tier system will also go by the wayside.  If so, then, presumably, we go back to “normal” as in pre-March 2020.  But I think everyone must ask themselves about their own comfort level in a post-pandemic world.

·       Sellers must determine if they want the public to wear masks as a condition of entering their home.

·       Buyers must determine their own comfort level of entering a crowded Open House with some visitors not wearing masks.

·       And Agents must consider their own comfort levels as well.  Do I wear a mask or not wear a mask?  Do I shake hands with someone if a hand is extended?  I admit that someone reached out to shake hands with me the other day and I was frozen for a moment with indecision.  I eventually did shake hands but then doused myself with hand sanitizer.  I think I even drank some.  I sure hope it was made with Ethanol rather than Isopropanol…

In all Open Houses we have had to date, everyone has followed the rules, everyone has been masked, no one has groused about the limit on occupancy and delays in entering, and there has been no need to police the rules.  So far, no issues.  All in all, the normal rhythm of our Real Estate market is returning.

Part of that normal rhythm is the timing of seasonal activity in the market and the timing of appreciation seen in housing prices.  In a normal market, if there will be appreciation in value, it will manifest as a quantum leap early in the year.  Then it begins to level out mid-spring, and level out during the rest of the year.  Our spring market typically begins to slow towards the end of May as families go on vacation, plan for summer camps for the kids and go to graduations.  It will be interesting to see what happens this summer.  Airlines are booked, hotels are booked and National Parks are seeing unprecedented levels of reservations.  It looks like everyone is hoping for a post-COVID getaway!

Now let’s zero in on our Local Market:

Year to Date Unit Volume Sold is on the rise.

      Our entire market is up 77% in Unit Volume Sold Year to Date over last year to date.  This is much closer to normal volume for this time of year.

The Volume of new listings coming to market is also on the rise.

      Active Inventory is up 53% Year to Date over last year to date.

      But this is still not solving the supply-demand dynamic.  This time last year, homeowners were just beginning to think about selling during a pandemic.  So inventory was really low last year.  This by no means suggests that we have all of the inventory needed to create a balanced market anytime soon.

      With more Inventory and continued overwhelming Demand coupled with increase in the Median Price, the Dollar Volume of Sales is up 113%.  While it is not surprising compared to rickety market we had this time in 2020, our Sales Volume is a bit higher than it was in 2019.

The Median Price is UP and moving quickly.

      Our entire market is up 17% in Average Price and 26% in Median Price Year to Date over last year to date.  This is holding steady from last month which is to be expected.

      Last year, the Shelter in Place orders gave a real shock to the system and we actually saw the Median Price decline slightly.  Then you may remember, the market began to recover steadily through the rest of last year.  This year, we are seeing our normal pattern of a quantum jump in prices in February and March, and things level out for the rest of the year.

Well, after last month’s short and sweet recap of events, you probably knew that this was going to be a long one.  I hope it has been helpful to give you some insight into our changing Real Estate world as we return to “normal”.

Until next month, stay safe and healthy.