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Real Estate Big Data

April home sales shows how confusing we are as people

(REAL ESTATE BIG DATA) April home sales have shown some interesting figures, and could be indicative of humans or COVID-19, we’re still not sure which.

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April home sales

If humans have a couple of giant, recognizable traits, one would be adaptability, and the other would be being confusing. Regardless of the circumstances surrounding COVID-19 April home sales defied conventional logic, and our understanding of sales history.

Having 2 months of solid lock down, and not a predictable end in sight, one would expect all industries, especially housing, to start crumbling and possibly collapse. Who would want to risk going outside, and looking at someone else’s home when there’s a virus running rampant? Also keeping in mind that at any moment you could be told you no longer have a job, so couldn’t get a new home anyway. Why take that risk?

The turn of many realtors and associations towards tech, and virtual showings must have made a major impact because April home sales actually increased .6%. That may not seem like much, but we need silver linings where we can find them. This small increase could be the result of a few different things that maybe we can capitalize on.

Home sales

First for the sake of safety, some people such as chief investment officer at Bleakley Advisory Group, Peter Bookvar think people are trying to get out of the large city centers, and head to rural areas. Not only for better social distancing to steer clear of the Coronavirus, but homes and land are cheaper.

Speaking of cheaper homes, the overall median home price dropped from $339,000 in April of last year to $309,000 this year. Knowing you have to pay a whole car less this year might incentivize you into that new home. Plus with inventory dropping from 331,000 in March to 325,000 in April, homes are running out pretty fast.

Even as the inventory quickly dissipates, newly constructed homes are still out there making up 1 in 5 sales which is up from 1 in 6 last year. Sure the number of homes being constructed and listed have slowed 13%, but not as drastically as existing home listings dropping 36.3%

As far as locations of the homes being sold, the South dominates with an increase of 4.7% in sales, while the others dropped 26.5% in the Northeast and Midwest, and 33.5% for the West.

We see a ton of ups and downs in all different sectors of the housing industry, without a lot of correlation between any of it. But home sales are up this month, and that’s something to be happy about.

Basically COVID-19, instead of throwing a wrench into the gears, added a couple of new ones we’re still trying to figure out. I guess keep your head up, and be as positive as possible; regardless of how confusing the markets, and we as people are, we can also adapt and be stronger in the end.

Colin is a Web Producer at The American Genius that spends more time with reptiles than a normal person would expect. Care for animals is one of his many passions alongside writing, drawing, gaming, and thinking of things to add to bios.

Real Estate Big Data

The impact of COVID on moving and housing market

(BIG DATA) Why are Americans fleeing cities en masse, and where are they moving to? As COVID-19 continues, long term living for many has new goals.

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Suburb many Americans are moving to. Gold sunset with a dog in the middle of the street with houses on either side.

As a country, we have had to make some noticeable concessions during the last eight months. Those concessions have ranged from saying goodbye to our favorite restaurants and Friday night rituals all the way to waiving hospital visits for dying family members. Since one of those things is much sadder than the other, let’s take a look at why Americans are moving — and where they’re putting down their new roots.

COVID has almost unanimously made all of our favorite haunts—bars, restaurants, bowling alleys, actual alleys, and so on—inaccessible. Even in cities with fewer restrictions than recommended by the CDC, visiting such places carries certain risk.

So why on earth would someone elect to live near “prime real estate” when the main selling point of their current location is rendered moot?

This is a question many Americans are considering heavily in the wake of the pandemic. As the “necessities” upon which many of us have relied are now shown to be tenuous at best, the dilemma of where one wants to live rather than where one has to live has taken the forefront of consumer consciousness.

Indeed, Americans who previously sought out bustling metropolitan locations are now looking to quieter suburbs, smaller cities, and even more remote living spaces to counteract some of the invariable cabin fever brought on by this last year.

At first glance, this doesn’t make much sense. Surely there will eventually be a COVID-19 vaccine, and homeowners in cities nationwide will pack into their favorite locations en masse… right?

Unfortunately, between mass closures of crowd favorites in the aforementioned cities and the sheer frustration with which many have been living, moving makes substantially more sense. This, coupled with the fact that the real estate market is absolutely primed for new buyers, is the main reason Americans are fleeing the city in droves to exchange their rooftop patios for a backyard and some semblance of personal space.

The other thing to consider is this: The pandemic isn’t even close to over, and families need relief now. By moving to arguably safer, quieter locations, citizens will be able to hunker down and wait for the vaccine for a little while longer—and that’s good for all of us.

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Real Estate Big Data

Commercial real estate continues to flounder, decimated by COVID-19

(BIG DATA) As COVID-19’s economic effects ripple out, and remote work becomes a main stay, commercial real estate is struggling and help isn’t coming.

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Commercial real estate overhead with highway in between.

Bad news out of the commercial real estate sector is confirming what many economists predicted would happen as COVID-19 scoured across the globe.

In a report by the Financial Times, some US commercial real estate valuations have declined as much as 25% since the beginning of 2020. Architect billings have also shown little improvement over the past several months, which leads many to believe that the sector will see a decline in new construction in 2021. While a decline in commercial real estate values was certainly expected due to the coronavirus pandemic, the new data paints quite an ugly picture for the market.

Hotel occupancy has also dropped 32% year-over-year, with revenue per available room dropping 50% year-over-year. Despite tourism beginning to come back to life in several states, hotels are still struggling to fill rooms at levels anywhere near what they were pre-COVID. Several hotel CEOS have slammed Congress for inaction over coronavirus relief, questioning why something hasn’t been done to help the industry.

“They are just so stuck in their positions. I feel so aggravated by it. Why can’t we work something out?” Best Western CEO David Kong said, “If we don’t get a vaccine soon and business doesn’t return, it’s going to get much worse.”

Hotels are some of the hardest-hit businesses in the commercial real estate sector decline, along with malls and come office properties. Commercial mortgage-backed securities (CMBS) investors are also feeling the pain, although there may be an end in sight for those trading in such financial instruments. Unlike the housing bubble of 2008, even if the CMBS market were to crash it is far smaller than the residential mortgage-backed securities market, meaning it wouldn’t cause a full-scale financial crisis.

With several major companies acquiescing that remote work is here to stay, some office properties are facing a doomsday scenario. Despite how bad the data is now many predict that the worst is yet to come, leading to a decimation of the sector as a whole. As coronavirus cases continue to rise across the United States, even companies that wish to return to the office will probably need to wait until after the expected “second wave” of the virus passes. So while it might be tempting to pick up CMB securities for your financial portfolio at all-time lows, you may want to wait—things aren’t looking up for commercial real estate.

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Real Estate Big Data

Are you selling real estate in a high-cancer-risk area?

(BIG DATA) If you own a brokerage knowing your local ecosystem can be beneficial. Whether it’s a humble brag on your blog, or a letter to a local rep, knowing your environment is always a good idea.

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Check your housing environment for cancer risk and support your area.

As a realtor or brokerage owner, you know the importance of understanding your community’s ecosystem in order to shape your business strategy.

However, have you considered how environmental and quality may play a role in those decisions?

This study published in Cancer suggests that you should. According to the study, “of every 100,000 Americans, 451 of us will get cancer in a given year.” The study “found a difference of 39 cases (per 100,000) people, between areas with the highest and the lowest environmental quality.

This establishes a significant link between environmental qualities and cancer risks.

The study also showcases a map of the US and the air quality of various regions. Red and orange areas have the worst air quality, while blue and green areas have the best air quality. As you might expect, large metropolitan areas have the worst air quality, and things improve as you move into more rural areas. You do find the most exceptions throughout the southeastern region and a vertical stretch that runs from the tip of Texas to the Dakotas up north.

These kinds of signs can either be a major benefit or a major obstacle to attracting buyers to your real estate market.

According to the most recent Gallup polls, 47 percent of Americans worry a great deal about the quality of the environment. So, how do you adjust?

If you’re in a blue or green area, make sure to get the word out! People now consider environmental quality as part of the quality of life factor. Don’t let that benefit go unnoticed. Blog about it on your own website. Use your social media to share data like this from other sources, or other information praising the environmental quality and protections of your market.

Integrate it into your marketing materials where possible.

If you’re in a red or orange area, you’ve got a bit more work to do here, and it’s going to get a bit political. There is already plenty of concern about attempts at the federal level to handicap agencies dedicated to protecting the environment. Be wary of such measures at the state and city level, and be a voice for the real estate economy in shaping this policy.

Does going to places of legislative businesses give you the heebie-jeebies? Find local organizations dedicated to improving environmental quality. Sponsor a river or park clean up event. Show your support for events like Earth Day. Don’t have those kinds of events? Harness your entrepreneurial spirit and bring these events to your community. Taking action as a community leader will be massively beneficial for your brand.

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