Please consider the Point2Point Flash Survey on Homebuyer Sentiment.
Key Points
- 19% percent are still determined to find a home.
- 18% are searching but not as actively.
- 22% have stopped until the outbreak is over and another 6% stopped searching for the time being. That’s a postponement rate of 28%.
- 35% claim to “not know” while “keeping an eye on the market”.
The other 6% is a mystery.
The Point2Point article title says “U.S. Still Optimistic Despite Outbreak” but that is certainly not my takeaway from those stats.
How Soon?
That question does not tell us how the coronavirus impacted their timelines. The next question is better.
How Has Your Home Buying Process Changed?
Key Points
- 42% say no changes
- 27% want a cheaper home
- 19% expect delays and a slowdown in all aspects
- 10% are paying attention to health hazards
- 2% may need financial health
That totals 100% which indicates survey flaws.
Clearly, someone might want a cheaper home and expect delays at the same time. That same group could also be paying attention to health hazards.
I see no indication that Point2Point allowed for multiple responses. One indication would be a total in excess of 100.
What is the Main Change in Home Selection Process?
Only 35% say their process has not changed.
Curiously, only 12% say they are putting the process on hold.
That is inconsistent with a 28% postponement rate (22% who stopped looking plus another 6% who stopped looking “for the time being”).
That is not necessarily a polling flaw but it is a logical flaw in answers vs the first question.
Methodology
The 5-question survey was posted on the Point2 Homes website between March 23rd and 26th. There were 2900 usable answers. All percentages were rounded.
The answers are interesting but I question whether the approach constitutes a statistically valid, random sample.
Mike “Mish” Shedlock
Real Estate sentiment is meaningless right now. According to Realtors, it’s always a good time to buy. Many of the Real Estate experts are clueless about what drove the demand in the last 10 years. They all sound like Lawrence Yun…some how Real Estate won’t suffer the same drops as all there other asset classes.
Look what’s going on in the MBS markets; everyone is selling the bonds and nobody is buying. Nobody wants to buy a bond secured by tenants that don’t need to pay rent or a home owner that doesn’t need to pay a mortgage. The moratorium on rent and mortgages will create some major issues of the Financial industry. This is what happens when low interest rates turn basic necessities into an asset class.
If someone has the cash, they could buy back their mortgage for less than what they owe.
Would be interesting to find out if covid has caused ppl to reconsider living in a large urban area? More than a few NYC ppl are hunkering down away from the city in much less populated areas.
The reason people from NYC can afford to hunker down, and infect the locals, anywhere they darned well please, is specifically because living in NYC placed them closer to The Fed, hence allowed them to benefit from the theft rackets which is all America has consisted off for the past 50 years.
While the locals they are now busy infecting, just got robbed in order to fund the looting.
As long as that remains official policy, there will remain no financial reason not to move to areas of greater probability of being a loot recipient, rather than some schmuck who just get looted.
By the time the Bismarck Stock Exchange becomes the biggest one in the country, and the North Dakota Fed the most powerful one, things may just change….
Regardless, in a society built solely, 100%, on nothing other than crass theft; being where the loot is distributed, beats being where it is collected.
“The reason people from NYC can afford to hunker down, and infect the locals, anywhere they darned well please,”
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I’ve been following with great interest the Outer Banks, NC. They implemented a policy that forbade NRPO (non resident property owners) from entering the OBX. Needless to say, a great deal of friction generated as those well to do folks lost access to their bug out spots.
I live in Nebraska & have 2 young kids looking to buy houses. We are using a local home builder/realtor to help our middle one look for properties. The current average time a home is for sale in 1 of the “larger” populated towns is approx. 36 hours. I asked the realtor/home builder if he was surprised that things weren’t slowing down due to the economy/covid-19 and he said somewhat, but the housing market in these areas has been red hot for the last 5 years or better. He told me he just sold 5 new builds in the last 2 weeks, took on 2 huge remodels and just purchased 4 more lots to begin construction on new houses on them. He said he can’t keep up at the moment, with the low interest rates, anyone with collateral is looking to upgrade. He also noted that he’s been getting interest from buyers on the coasts looking to move to his area, which is a suburb of around 20K people outside of the area where my daughter is looking for a house.
We’re still running on air like Wyle E. Coyote. The unpaid bills haven’t had time to really snowball yet. That 1200 dollar check will buy us a week, maybe, backfilling that hole, but when it’s gone and people realize there isn’t any more coming, the looting will start.
Our government just threw 40% of the population under the bus with gift card, and that’s too big a pile for the bus to get over. The bus will stop.
“The unpaid bills haven’t had time to really snowball yet.”
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Yes. Most people pay bills end / beginning of month. Virus didn’t get serious until about 3 weeks ago. The rubber meeting road starting NOW.
That 1200 dollar check will be paid back in taxes with interest, plus the untold thousands in this thinly disguised scam to bail out the buyback queens. Foreign money is not going to buy US debt, so where will the interest rate go?
“How Did the Coronavirus Impact Homebuyer Sentiment?”
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Too early to tell.
They need to ask these people in a few months when many don’t have jobs and home prices become “unstuck” (to the downside).
Totally agree… Q2 starts tomorrow, corporate layoff will start then because companies will be guiding lower, they can take the severance it in 1 quarter and have a lower cost structure heading into Q3. The markets should resume the downward trend as they realize the service economy supports the corporate economy.
“The markets should resume the downward trend”
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Yes, at some point. “Experts” still gravitating around notion that once virus passes back to usual for economy (therefore must stay in the market for the bounce). Had to laugh at Bernanke’s comment last week comparing virus to “a snowstorm”.
Boy, are they in for a rude surprise as a HARD sustained recession unfolds.
Is home closing an essential job? I wonder if places that are quarantined even have home transactions.
It’s Probably essential in order to receive a paycheck.
Here’s my anecdote, take it for what it is worth:
With three young kids, this 1500 sq foot starter home is feeling smaller by the day. We had been looking over the last year for a larger home, and in the last few months had become very serious. Current home is prepped to sell, and we were targeting a May-August move. Our budget was 50% over our current home’s value, which would nearly triple our square footage and get us a larger, wooded lot. In terms of mortgage to income ratio, payments were going to be at around 28% of take home. A little on the high side, but the plan was to stay in this home for a while and income will increase once all the kids are in school and SO returns to the workforce.
Everything has been put on hold indefinitely. It makes me sick thinking about spending that much on a house right now, and I’m so glad we didn’t. There is too much uncertainty right now, and the house we’re in would be manageable if I lost my income. If we had already moved, that wouldn’t be the case.
In terms of the market, I’m seeing less homes go on sale, I’m already seeing prices tick down slightly, and days on market tick up. I have no doubt that continues for the next few months and beyond. I’m not sure when we’ll be ready to buy again.
That’s a far more reasonable assessment than the ones I’ve been seeing from people. If you aren’t making 6 figures, or even high 5, this is the response I’d expect to see. Average people just can’t gamble on anything, as uncertain as it all is right now.
You could cut my income in half or double it, and my reaction would be the same. The question isn’t income, it is moving from debt to income in the high teens to 28%.
I am a real estate agent along with some of my other lines of work. I maintain my own website with MLS access. I have seen more than 50% drop in traffic over the last two weeks. Two weeks ago I had traffic of 1900 users on my site, this week 500. I use Google Analytics for my web traffic data. Had a couple of deals delayed as well due to the virus.
Another anecdotal observation: neighbors, friends, and family are about 2-3 weeks behind me in their sentiment. When this thing hit in China I was stocking food and limiting trips outside the house. When Trump declared a national emergency I had already canceled memberships, pulled kids out of school, stopped my travel for work, etc.
There is a curve people are on relative to their understanding of how this will impact them economically. I think there are a lot of people who still haven’t grasped this yet. I would expect that 500 to drop to 100 shortly.
The virus will one day peak then decline and people will basically forget about it. They will not have a lot of choices because the economy will be severely disrupted.
I found a house on the net in Florida I really wanted, enough to bid full price sight unseen at least in person. That was January before we had an epidemic. Yesterday I signed the closing summary and close next Monday. I did go there super bowl weekend and it was even better in person than on the web.
Because I am on a fixed income my primary concern is with monthly affordability. The house is less per month than rent on a borderline hovel in Southern Oregon, yesterday I left for the move. It is not easy, some motels are closed, all restaurants are either closed or doing delivery only. Drive throughs are working but I can’t use them because the moving truck with car carrier is too large. I had pizza noght before last but nothing since other than some pepperoni sticks from a gas station.
Have to drive through Los Angeles today, not looking forward to that so waiting in hopes of missing the worst of traffic, but traffic is still relatively heavy in spite of quarantines. Some spots along interstate 5 are in such bad condition that the right lane should be cosed, and speed limit reduced to 45. But, I saw the right lane with trucks as far as you can see basically bumper to bumper headed south. It should have been 4 lanes in both directions south of Sacramento 20 years ago and it is still two lanes each way, but I should be on I10 by noon.
My attitude about buying a house is I plan to live in it till I croak, so I am not viewing it as an investment upon which I may lose money.
People might think they can hold out for a lower price in a devastated economy,maybe yes maybe no. In the GFC banks took houses and sold them for a fraction of what they sold for just prior to the GFC. That is true. But then banks started sitting on the houses till they rotted into the ground. Prices went up not just a little but into a larger bubble than they were even in 2007. Demand is out there. And will be damaged for a while but then roar back as pent up demand kicks off bidding wars again.
I actually believe that deflation is not going to happen aside from a short period of depressed demand, but, the vast and TOWERING money printing will have to trigger inflation as we come to the other side of this later this year. And that inflation could be as staggering as some of the other nightmare economic data we are seeing now.
My snow bird condo sale in FL closes this Friday and than I am OUT of Florida Thank God!
Numike. Near my new house there was a three bed 2.5 bath 2 car garage end unit condo that had a LOT going for it (for a condo) for $118k and would have had a monthly rent of about ~1,500 and which actually sold for $68k, I was shocked when I saw that, who even has the balls to make an offer so far below asking? That would be like going to your broker and saying I want a round lot of Amazon but I think two thousand is a bit steep, how about I pay you $1,000 per share? And congratulations.
Look at the disparity between rentaL INCOME AND cost to rent it out. The profit is enormous, and rental RE is a negative cash flow business model, yet this place generates $1,500 per month MOL for the cost of a mid range Mercedes.
As for the quality of Florida, I am in the process of moving and have made it as far as Arizona. I have seen a LOT worse places to live but no matter where you live it is about what YOU make of it. I found a house that I can make into my own home, a place to belong, mine, and I cannot do that on the coast where I was born and raised. I would need to double my income (min) to be able to live anywhere within 700 miles of my hometown. And I am now within ten days to eighteen years, no less no more, of my death, so I am going to make the best of my remaining time, where I never have to worry about being warm again, I wore a coat in the house all winter with a throw over me because I was cold and even then the power bills were obscene, had I set the thermostat to a comfortable level the power bill would have meant needing roommates.
“And that inflation could be as staggering as some of the other nightmare economic data we are seeing now.”
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I know I sound like a broken record, but there will be NO sustained inflation until the massive debt overhang addressed.
Tony, we agree to disagree. Money IS a debt overhang and the solution to all economic problems has always been to print more money and inflate asset prices. they did it in the GFC and they will do it again. Only this time having learned what they did from the GFC they will act quicker and they have.
Besides, taking money/debt/credit (all the same thing) OUT of an economy will just mean the goods and serviced produced will have to cost less not more.
And, I storngly suspect that you are counting the right’s favorite boogyman “future unfunded liabilities,” rather than what already is on the books. My problem with that is a liability is NOT a liability until it has to be realized. What those people are guilty of is an accounting sin of periodicity.
“Money IS a debt overhang and the solution to all economic problems has always been to print more money and inflate asset prices. they did it in the GFC and they will do it again. ”
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Two things.
Money is not debt.
No argument with rest of your words here. But – like you say – they have been “printing”* for the past 11 years – where is the inflation?
*printing does not equal money. What do you think Japan has been doing (on a much grander scale than US) the past 30 years? They have had disinflation / deflation the ENTIRE time.
Tony I agree with that but it is splitting hairs to say MONEY IS NOT DEBT, you should know me well enough by now to know FRNs while they may not be “money” in the verbage of the far right, I still use it as a generality because they are A) the only legal tender in the US and B) untill PMs are no longer priced in FRNs they are essentially money with a floating value against each other.
But, when I say there will be massive inflation I do mean it will take many MANY more FRNs to buy a house or loaf of bread or pint of beer. Now surely you can agree with that.
Sorry for the shameful condition of the I5 southbound lanes. We have one of the highest gasoline taxes in the country, but it’s hard to find the money for road repair when you’re building a magnificent $100 billion bullet train from the bay to a walnut grove north of Bakersfield…
GOD! Bakersfield, just UGH! What a shithole. My first stop on the trip was at Buttonwillow on I5, because that was at the point I had to decide whether or not I would take 5 to the 210 (which becomes interstate 10) and drive through the LA basin, or take US58 to I40 and on to Needles and then 95 south to I10 at Blythe. Some fucker stole the gas out of the moving truck ($77) and it was just a nightmare, I got maybe 2 hours sleep. I decided to go to Needles and wow what a bad decision, the mountains were hard on the truck. Over half the I40 part was construction zone.
The real problem with California now is that it had 14 million people when I was born and has now over 40 million. You can’t see that level of increase in that period without losing all that was good about a place. Especially when half the increase are foreigners who are used to poverty and lawlessness. Tolerance for drugs also is a dead end for any civilization. I swear that the vandals in California would tag a chainlink fence just to be ruining SOMETHING and now that everything else has graffiti what else can they ruin? You know a society is in deep shit when it lables graffiti “art.” Ditto the perfect one of a kind skin you were born with.
That seems like the long route to Florida. Why not go diagonal where you can. You also will have better luck with stuff being open outside of California.
I think Herkie is smart going south this time of year, especially towing. All the high mountain passes can change from dry to ice rink slick in a few minutes’ time. Forecasts are semi-worthless predicting marginal changes a day ahead.
Ah yes. I forget its not warmer yet in the Rockies. And going through the Mojave makes little sense as well.
All of the estern border of California is either the Sierras or Mojave, it is one or the other. The Mojave is not that bad this time of year, and the plus is that it is so dry the roads do not get as messed up. It was about 85 yesterday afternoon crossing it. I would have thought there was some gorgeous scenery but the air pollution in California is now so bad you could not really see much. It has also been very cloudy and I thought we might get a major thunderstorm, those can be very dangerous in the desert.
There is no good diagonal rout from Medford Oregon to Tampa. Especially when you would have to go through the high Sierra and the Rockies. But, even that is a bad idea in summer because you have to cut east at Sacramento and go NE to Reno, and by the time I80 actually stops going NE and goes due E you are almost as far north as Medford in Oregon is. Also, I80 is possibly in worse shape than any other interstate, it is a MAJOR east west truck route and should have been three and four laned many years ago. There is no interstate that goes diagonally across the country west of the mississippi, there are north south and east west, so you have to take them as a series of like stair steps. And if you have to go over mountains in March best to do the southern mountains where there is no snow on the roads. And by the way, it was storming like hell in northern California. All the way from Weed to Sacramento almost the visibility was really poor. And I am towing a car carrier with my BMW, I really thought that would be worse than it has been.
LOL, on the lighter side, when I cut off on US 95 from I40 at Needles to I10 at Blythe I got stuck behind a 50 year old stakeside truck that was delivering to porta potties to somewhere out in the desert. Climbing the initial grade I had to shut the A/C off and open windows, OMG the stench from the porta potties was disgusting. Maybe they were taking them to be emptied. US 95 was a dirt fucking track let me tell you. I think the last time they did maintenence must have been the 1960’s.
I think there are more important matters right now than whether some economic statistic is statistically valid because of sampling technique. We will look back on March as the calm before the storm.
this Coronascam is a dry run for martial law,it’s a war game,a drill,a test to see how quickly they can corral the populous,why? Simple…..the federal govt has collapsed or danger close to collapse.The one fly in the ointment is…..all the guns….that’s next!
The only collapse is the the number of functioning brain cells in your head.
You need to have yourself 5150’d.
There’s no “they” at the top planning jack shit beyond the next month’s act of theft.
I didn’t know anyone that has this till tonight. My son is on 14 day quarantine. They didn’t test him because he did not have a temperature 102 or over, and he is young (39). Told him to come back if his temp rises. I figured he’d be prime for the virus. Goes to City-County building in detroit with lot of people in crowded conference rooms and uses elevators to get there. So far symptoms are flu like aches that lasted a couple days, low grade fever, also shortness of breath that comes and goes. The shortness of breath comes and goes in waves was the tell tale for the medical staff.
Best wishes for your son’s recovery.
Did they prescribe him anything ?
Might want to look into loading up on vitamin C Per this story:
You can only get a limited amount of Vitamin C by taking it orally. This is about using an IV, which can give the patient much higher levels.
I bought a 3-bedroom brick home in Oklahoma last summer for $120k. I added a tornado shelter for $2700. I expect my house to decline to what I believe is its ‘natural’ price – the 20% down payment. About $24k for this puny job.
In about 3 1/2 years I shall have take Required Minimum Distributions on my IRAs. This will result in a tripling of income (and taxes) and I expect to be looking for a more expensive home for a tax break. (I might have to get remarried and have a few more kids). The way things look, I’ll have to spend about $200k but get something 3-4 thousand square feet with an acre lot. Don’t know what I’ll do with this house.
In the mean time, as the Depression sinks in, there should be some good deals on things people want but don’t need – like musical instruments, pool tables, RV trailers, etc.
The fun cruise industry is dead but I am hopeful there will still be some European river cruises I’ve always wanted to take. There’s at least one starting in Rotterdam, proceeding up the Rhine, ‘canaling’ over to the Danube and ending at the Black Sea after visiting 16 European capitals. I’ll top it off with clandestine trip to Crimea.
I’m wondering if the whole “realtor” scheme is about to change. The US Justice Department is investigating the industry over monopolistic practices.
Here’s how I interpreted what you wrote. You intend to finance a more expensive house when your income goes up so you can needlessly pay interest in order to get a tax break.
In other words, assuming you have no other significant deductions eligible to itemize, you’re going to pay enough interest to overcome the standard deduction threshold of about $14,000 (assuming you’re over 65). Then, for every $1 in ADDITIONAL interest you pay over $14,000, for which you get nothing extra back you wouldn’t have received anyway, you’ll get back about $0.24.
Yeah, that’s brilliant! Spend $1.00 to save $0.24 in taxes. Oh, and to have interest payments that high, your mortgage rate would have to be about 5% on a $400,000 house.
Are you f***ing nuts?!
Don’t know what the interest rate will be but there’s also real estate taxes. Not sure if I’d take out a loan or not. I certainly wouldn’t buy a house at my age unless I could buy it outright, even if I did take out a mortgage.
I’ve have always maximized tax breaks and always will. Frankly, I’d rather burn money than give to those ‘people’ in Washington.
So you’d rather give $1.00 to the bankers than $.24 to those ‘people’ in Washington? If a housing purchase makes sense for other reasons such as size, location, amenities, etc., then doing it in a way that maximizes the tax benefits makes sense. However, it doesn’t make sense to do it primarily for the tax deductions. Note also that the property tax deduction is included in the state and local tax deduction cap of $10,000. Don’t let the tax tail wag the dog.