MLS-Export-compressed

2020 Market Review and Update

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San Mateo County

 

As I am sure you will agree, the year 2020 will go down in history as one of our Nation’s most difficult. Who could have foreseen in 2019 that we would undergo political and social turmoil, a deadly pandemic and a bitterly contested Presidential election?

By mid-March 2020, my team and I thought we were headed into a dramatically slowing market. Little did we know that we were about to face one of the most robust real estate markets we had seen in years. In 7 months, I personally sold 28 homes totaling $54M in sales.

For six weeks after Shelter In Place (SIP) began, the local housing market came to a standstill until early May. At that point, people began to realize that working and educating our children from home would soon become our new “normal”. With that, people began to re-evaluate their housing needs.

What we saw was a tremendous upheaval in our housing marketplace. The most popular keyword search term on our company website was “Outdoor Space”. People from San Francisco decided to move to the suburbs for more space. We saw a rise in condo and townhome sales as sellers wanted to upgrade into single family homes. People in 3-bedroom single family homes needed more rooms for an extra office or a “zoom room” for their kids to attend school online. Those who owned 4-5 bedroom homes who were nearing retirement decided to take advantage of the historically low interest rates and move out of the area to low or no-income tax states like Washington and Nevada.

Despite not being allowed to have open houses, our housing market became frenetic. Home values on the Peninsula began to shoot up again, multiple offers became the norm and homes were selling within a week to 10 days. With interest rates still hovering at historical lows in the high 2%/low 3% range (depending on loan size and loan product) and low inventory, we continue to see much of the same as we ease into 2021. We expect it to continue well into the second half of the year.

I will continue to keep you apprised as the year wanes on. If you have any additional questions, please do not hesitate to reach out.

Best,
Caroline

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What will be the Economic Impact of Covid-19 Crisis?

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“Life isn’t about waiting for the storm to pass. It’s about learning how to dance in the rain.”

I hope this email finds you all doing well and staying healthy! I’ve been staying very busy between all the Zoom meetings for work, trying to homeschool my 7th-grade daughter and binge-watching “Ozark” with my husband.

In terms of our local real estate market, I’ve sat on a multitude of webinars, and conference calls over the last several weeks with economists, real estate experts, and prominent wealth managers. While nobody has a crystal ball, the general consensus is that:

1. Real estate will help lead the country out of a recession this time around. Interest rates are still historically low. We live in an area with such a diverse economy. Unless interest rates start to tick upward and we start to see layoffs at some of the local tech giants, I don’t see our market declining anytime soon. It may level off but I don’t see a decline in the short term.

2. Real Estate as the “safer asset”. After the dot-com bomb, people will probably move their money from the stock market into real estate as it will be perceived as a “safer” asset class.

3. Our local market seems to have picked up in the last week and a half. We are seeing fewer homes being withdrawn from the market, more homes being put on the market and pending sales are up 42% since the week of March 29th. (See slide below).

4. Being stuck at home has inspired people to look for bigger homes. Our CEO shared on Monday that:

• Web traffic was up 30% from previous weeks.
• 20% of consumers are looking for Single Family Homes
• The most popular search term is, “outdoor spaces”.

Fun Fact: China, where property transactions were at or around zero for the three weeks following movement restrictions, had within two months recovered to 50% of the 4-year average.

My Favorite Binge-worthy Shows: Money Heist and Ozark. Both are on Netflix.  
If you have any questions or if I can help in any way, please don’t hesitate to reach out. 

Stay well and stay safe!

Best,

Caroline

What will be the Economic Impact of the COVID-19 Crisis?

On April 28th, McKinsey & Company’s Global Managing Partner, Kevin Sneader appeared on CNBC to discuss how his firm is advising multiple governors on when and how to reopen their states. In his words, the decision hinges on one question: how do you reconcile the saving of lives with the safeguarding of livelihood? 

There’s no easy answer. And with 70% of the US workforce unable to do their jobs from home, states need to consider how to make sure there is enough PPE, testing, and contact-tracing in place to be confident that once they reopen, they won’t have to shut down again.

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How This Could Unfold

A recent survey of over 2,000 global executives showed that many expect the recovery to look like one of the scenarios shaded in blue below (A1–A4) which lead to a V- or U-shaped recovery. In each of these, the COVID-19 spread is eventually controlled, and catastrophic structural economic damage is avoided. 

Almost one third of these leaders anticipate a muted world recovery where US GDP could drop 35-40% in Q2 of 2020 and won’t return to pre-crisis levels until Q1 of 2023 (A1). A slightly more optimistic outlook was the second most anticipated scenario, reflecting virus containment by mid-Q2 of 2020 with an economic rebound following Q2 2020 (A3). [Source: McKinsey] [/et_pb_text][et_pb_image src=”https://carolinedinsmore.com/wp-content/uploads/2020/05/image-2.jpg” _builder_version=”4.0.9″][/et_pb_image][et_pb_text _builder_version=”4.0.9″]

Which Sectors are being Hit the Hardest?

 

  1. Commercial Aerospace
    May take years to recover from production and supply chain shortages 
  2. Consumer Air & Travel Domestic recovery is likely to recover faster than international travel
  3. Oil & Gas
    Oil price decline driven by short-term demand impact and OPEC+ decision to increase supply
  4. Insurance Carrier
    Reduced interest rates and investment performance impacting returns
  5. Automotive
    Trade tensions and declining sales amplified by an acute decline in global demand
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