Market Update July 2020

The numbers are finally in for July. I know it's a little bit of a delay. But usually, those numbers don't come filtering in until the second week of August. So here we are a bit past the second week of August. And we've seen what our market is doing. I'm very grateful to all of you because New Mexico Dreamhouse has maintained its spot as the #1 team in San Juan county through July. So we're very excited about that both in units sold and volume.

Thank you guys so much for all of you who have used us to buy, sell or invest in real estate. We're very grateful we couldn't do this without you. But without further ado, I want to get into some market stats. There's a lot of misinformation going on right now because of COVID-19. I've heard people give conflicting reports from the market is booming to the market is dead, and you shouldn't do anything right now. Neither one of those is particularly true. We're actually in a very well balanced market. I've seen a few stats here and there and the one that I wanted to talk to you about specifically today because I believe it's the most misunderstood statistic out there is something called an absorption rate. Now an absorption rate means that if we stopped listing property today in San Juan County, how many months would it take to sell the rest of our inventory? And a good mark of a healthy, well-balanced market is right at six months. Anything over six months is generally considered a buyers market, and anything under six months is usually considered a seller's market, the keyword being typical. Now we've seen some interesting things this year with COVID-19 and everything, and what we've seen is a drastic reduction in our absorption rate. What's causing this?

I was out on a listing appointment the other day, and it was a competitive listing appointment. I didn't get the listing; they were talking to another real estate professional in the area who said, "You know what, it is a seller's market right now, we can price above the market, we can do all of these things, and we can still sell your house for full price." Unfortunately, that's not the case, and the market dictates what we can sell houses for, just because we've dropped under a six-month absorption rate doesn't automatically mean that we're in a seller's market. In this particular case, what that means if you delve into the actual numbers we've seen sold listings drop year to date by 3.4%. That's not bad at all, given that we're in a pandemic I'm happy with that. As far as my team goes, we're up about 50% year to date over last year, so we're excited about that. Some of those things that have been luxuries for us are competitive advantages like our 3d tours in our professional photography. Our video tours were a perk before, but now they've become essential. And that's what I attribute our success this year too. The next stat I want to go into is pending listings. Year to date, we're down about 7.5%, which is still not an alarming statistic. If somebody tells you that we're technically in a seller's market, that's nonsense. Don't listen to that garbage because these numbers are skewing that data. The other number that's skewing that data is active listings. Active listings are down about 18% year to date from last year. And what that means is that consumer confidence isn't that high. People are afraid to list their houses right now because they don't know what will happen. Same with new listings, new listings are today down about 17%. So all in all, yes, we do have a dropped absorption rate, but we do have a drop in sales, but we have an even more drastic reduction in new listings and active listings. That will drive the numbers in a direction that seems opposite to what the markets are doing.

If you want to sell your house. The good news is, is statistically speaking; you're probably going to get about the same value that you would have last year for selling your house, we have an increase in value. The percentage of homes that are on the market that are selling that number has gone up. So if you list your house, you have a better chance of selling your house than he did last year, which creates some unique opportunity. We're in a market where it makes as much sense to upsize or downsize because we're very well balanced. The other thing is if you've been thinking about upsizing and house over the next couple of years, now's the time. I saw a statistic the other day that said house affordability is real

estate's been booming nationwide for about five years now. Now, we've missed that boom in San Juan County, because of job loss and some of the tumultuousness in the natural gas markets and the coal market. Even though it's been booming nationwide, House affordability is the lowest it's been so you can afford more house for your dollar than any time since 2015. Because of the way interest rates are, I had a client two weeks ago, close at 2.7% on a 30 year fixed rate. So I'm not saying that it's always going to be under three, but we're hovering around three. These are historic lows. And if you're thinking about upsizing, you need to take advantage of it. And if you need help or want somebody to walk you through the statistics or what it's going to take to sell your house. I would be honored to come out to your house and interview to get your house sold. If you have any questions, post them in the comment section, if there are any topics that you'd like to discuss concerning real estate, put it in the comment section. I'd love to come back next week and answer those questions.