Posts

International Buyers Looking At US Housing More Than One Year After Pandemic Began 

During the first year of the Covid-19 pandemic, the US saw a major increase in domestic real estate transactions. International buyers took the opposite approach and avoided investing in any US properties while the pandemic continued due to the uncertainty of the world’s economy.

Sales of US homes to foreign buyers fell by about 31% from April 2020 to March 2021, according to the National Association of Realtors. 

International buyers purchased around 107,000 properties during that time, which marks the lowest unit volume and lowest dollar volume since 2011, according to NAR. 

Embed from Getty Images

“The big decline in foreign purchases of homes in the U.S. in the past year is no surprise, given the pandemic-induced lockdowns and international travel restrictions.”

“Yet, even with the absence of foreign buyers, the U.S. housing market strengthened solidly,” said Lawrence Yun, NAR’s chief economist.

China, Canada, India, Mexico, and the United Kingdom are typically the top five countries continuously investing in US property. The amount of money brought in this past year, however, was down by at least 50% for buyers from China, Canada, and Mexico. The UK was the only nation that actually saw an increase in investment this year. 

Normally, China takes the lead in terms of the most amount of US property purchased throughout a given year, however, those transactions decreased significantly during the Trump administration. Now, China buyers have been inquiring more and more. 

“There has been quite a positive impact on the demand from the Biden boost, as the U.S. is being perceived as much more predictable now, and visas are also much easier to be obtained.”

Embed from Getty Images

Georg Chmiel, executive chairman of Juwai IQI, a home listing site in China claimed that “on the other side, and now that we are over a year dealing with the Covid pandemic, it has lessened the impact on the buying decisions because flights to the U.S. are possible.”

Home prices are now 15% higher than they were pre-pandemic in the US; which makes sense considering the economic impact the nation has been enduring. Chimel stated that these rising prices, however, create a new demand for international buyers who may be afraid that they’re missing out on prime investment opportunities.”

Additionally, homes in the US are much less expensive than homes in places like London or Hong Kong, where a lot of buyers inquire about US property. The number of virtual tours on almost all major real estate sites in the US have increased exponentially. 

“So if that’s an indication of the comfort, then certainly this has increased, because people are now used to do far more things online shopping, education, also working from home online, and that also had an impact on the property market,” said Chmiel.

“As travel restrictions loosen and foreign students return to U.S. colleges in the upcoming year, there is likely to be some growth in foreign buying of U.S. real estate. High home prices and the ongoing lack of inventory could, however, pose a challenge for buyers,” Yun said.

What Homebuyers Are Looking For In A House Post-Pandemic

Now that more Americans are getting vaccinated and starting to resume their normal lives, many are looking to move around the country for a truly fresh start. However, we aren’t fully out of the woods when it comes to Covid-19, so many prospective buyers are changing their requirements for what’s needed in a future home to accommodate their post-pandemic lifestyles. 

One survey from realtor.com showed that extra space for extended family, pets, and home offices has been top priority for most buyers, it’s also one of the reasons the housing market is on the rise in the US right now. 

Embed from Getty Images

Realtor.com’s survey also showed that terms like fenced yard, acres, backyard, front porch, garage, and three-car garage, have been some of the most searched for requirements from buyers in the past year. 

“The COVID pandemic ushered in a new way of thinking about what home means, and that is influencing much of what today’s home shoppers are looking for.”

George Raitu, realtor.com®’s senior economist claimed that: “Garages, large backyards, and space for pets always rank high on buyers’ wish lists, but those features have grown in importance. The survey results highlight that the pandemic has elevated our relationship with family as well as the need for our home to serve multiple purposes, especially the ability to work remotely. As a result, we are placing a premium on the need to accommodate extended family, and features like a home office and broadband internet.”

Embed from Getty Images

The following 10 features have become the most prioritized requirements from buyers according to the survey (in order from most to least): quiet location, updated kitchen, garage, large backyard, outdoor living area, space for pets, updated bathrooms, home office, broadband internet, and an open floor plan.

65% of buyers claimed that they were considering their extended family when it came to shopping for a new home, and nearly 25% stated that they planned to move closer to family. 20% have claimed that they will be having extended family living with them full-time while 30% said their new home would need to accommodate for guest visits. 

“Remodeled homes dropped 88% year-to-date through May. It appears that motivated buyers are making concessions in their home search as home prices rise. Fewer searches are occurring for otherwise popular features such as granite countertops (down 58%), theater/media rooms (down 65%), and bars (down 52%),”  the report notes.

The housing market in America is currently on the rise, with most states reporting that homes aren’t staying on the market for more than a couple of weeks due to the increased demand for relocation among American citizens.

Hawaii Real Estate

Hawaii Real Estate Agents Report Unexpected Spike In Sales 

Catherine Pennell is a real estate agent representing Kauai for KW Kauai Keller Williams in Hawaii, who claims that the housing industry in Hawaii has been booming since April. Pennell says she’s fielding two to three phone calls everyday from people living in the United States looking to move to Hawaii. 

“I think people are saying, ‘Life is short.’ It’s a lot of talk because they’re not here yet and they can’t get here yet, but I’ve done more sight-unseen sales than I’ve ever done during the pandemic, three in the last three months.”

Embed from Getty Images

Julie Peters is another real estate agent working for Island Boutique Realty on the island of Hawaii, who recently spoke with the press about how when wildfire season began in August she was fielding at least one call each day from residents of California looking for places on the island away from all the smoke and fire danger. 

Peters recalled how “one person wanted to come over immediately and rent in the meantime because she was so done with smoke. The last five closings I did were sight-unseen. I had rarely done that before.” This seems to be a major new pattern for Hawaii real estate, but also the industry in general. Buyers are more willing to invest in properties before seeing them either because they want an immediate escape from their current reality, or due to the Covid-19 pandemic making in-person viewings difficult in many areas of the country. 

She claims that a majority of her buyers this year have been from the Bay Area. According to Title Guaranty, which owns the largest real estate database in Hawaii, from January to June 2020, California residents bought $587.6 million worth property in Hawaii, making up 41% of total sales during that period coming from the U.S..

Embed from Getty Images

“Demand for Hawaii is always there, but it’s just grown exponentially this year. A lot of people that were already looking toward retirement here sped it up, or people found out they could work from home. We got a rush of that and then the West Coast fires happened.”

Hawaii is also currently enduring a massive wave of new condos and other properties being placed on the market. In August 2020 new listings for condominiums went up by 97% when compared with the previous year. Single-family homes, on the other hand, are being bought at a much quicker rate. 

Cash offers have also been the most common form of payment, as those offers are more likely to go over the initial asking price. This influx in purchasing, however, doesn’t mean that the industry in Hawaii isn’t struggling like the rest of the world. Active listings were down by nearly 20% between April – August 2020 versus 2019. Honolulu County specifically saw an 18% decline while Maui County saw a 9% dip. 

West Coast buyers have increased exponentially as well as the concept of virtual listings/house tours. The pandemic, wildfires, and lack of active travel make it nearly impossible for buyers in the US to look at spaces in real life in Hawaii to move to. This new wave of blind buying is likely just the beginning of a new era of real estate in a post-pandemic world.

NYC Real Estate

Manhattan Real Estate Stronger Than During The Great Recession

According to a recent analysis by real estate market data firm UrbanDigs, the Manhattan real estate market is currently in much better shape than it was during the Great Recession. Like most industrys adjusting to pandemic life, however, the future is still very unclear and fearsome. 

The report claimed that there were much more sellers than buyers during the Great Recession but now, during the Covid-19 pandemic, that gap is much smaller. Noah Rosenblatt and John Walkup are the cofounders of UrbanDigs, and recently claimed that they believe this gap has lessened because the Great Recession was a strictly economic crisis in America while the coronavirus has halted every single aspect of life for everyone, regardless of socioeconomic status. 

Embed from Getty Images

“The lack of sharp spikes in supply and a corresponding drop in demand suggests the market is not as one-sided as the Great Recession, although lingering virus fears will keep a lid on demand for the time being.”

The report heavily focused on comparing the supply and pending sales of the past six months with the first six months of the recession as well. They also focused on what’s known as the “market pulse,” which essentially is the ratio of pending sales to actual supply. A lower ratio number would reflect that there are more sellers than buyers. 

In September 2007, supply increased by 10% every quarter and pending sales were dropping at a rate of 30%, according to past analysis’. The 15 quarters that followed showed a steady increase in supply, and a major drop in pending sales; 50%, dropping the market pulse from 1 to .16. When the pandemic initially shut everything down in March, there was a major drop in pending sales, which boosted supply, however, it was nowhere nearly as quickly as it dropped in 2007. 

Embed from Getty Images

The market pulse is currently at a .22, which has been expected due to a general pulse decline within the past five years in Manhattan; in late 2019 the pulse was at .3. Rosenblatt and Walkup noted that sellers today in the metropolitan are still facing the heaviest competition in nearly a decade due to the increase in properties available, and willingness from sellers to negotiate their pricing. “Clearly, the economic impact of the pandemic has yet to be fully tallied, but in the meantime, it appears that the market for Manhattan real estate is functional, just fearful.”

Overall, however, the two believe that comparing the state of the market now to what it was during the Great Recession is like comparing “apples to oranges.” While there may be many general similarities the differences fully outweigh them. There have been spikes in the unemployment rates during both events, however it’s broken major records within the past six months because the job losses are more sudden and frequent. The two do believe, however, that whenever this pandemic does come to an end unemployment will hopefully bounce back quickly, and the supply and demand of the market will follow. 

“NYC real estate and the economy, in general, are weighing other exogenous forces so with that in mind, certainly, there is more room for real estate to go down, but in the long run, the city will renew itself, even if the process might be bumpy.”

Industry workers believe now would be a great time to invest and negotiate in real estate if you are lucky enough to have that ability right now. They also believe that Manhattan hasn’t seen the absolute worst that the pandemic can do in regards to negatively impacting the market and sales, so like the rest of the country and its many industries, they’re taking every precaution currently imaginable to stay afloat.

Buying Real Estate

Why Investors Are Continuing To Buy Real Estate During The Pandemic 

Investing in real estate property in the middle of a global pandemic and nationwide recession may seem like one of the worst financial decisions one could make, however, many are finding it to be quite the opposite. Real estate prices in major cities all across the country are dropping as many individuals have been fleeing the close, busy life of the city to return to their suburban homes while they wait out the rest of the pandemic. 

The market is extremely slow, the economy is weak, and property listings are going down, which is leading to a lot of buyers receiving amazing deals on homes and apartments they may have not been able to afford nine months ago. 

Embed from Getty Images

Specifically, if we look at New York City as an example, we know that this metropolitan is one of the most expensive markets in the country. In the second quarter of 2020, real estate sales in NYC unsurprisingly plummeted by 54%, which has been the largest decline in the market in 30 years. As a result, sellers have grown more desperate, which is placing many buyers in the position of power in terms of negotiations. 

The average sales price for properties in Manhattan has dropped 18% to $1 million when compared to 2019’s sales; the biggest sales decline in the past decade for NYC. In California, a state that’s relatively equal to New York in terms of real estate market, Orange County reported a 5.2% drop in pricing, and that number is expected to increase by another percent within the next year. 

Besides the market being more in favor of the buyer, people are beginning to become a lot more appreciative of the spaces they consider home. Now that we’ve all, for the most part, been quarantining or working remotely in our homes, many are beginning to realize they want a space that truly makes them feel safe, leading to even more sales. People are being inspired to invest in their property more and push their spending to match up with what they truly want. 

Embed from Getty Images

Along those same lines, for those of us working from home indefinitely, we’re beginning to realize that our homes now need to be divided to have an area dedicated to work, and the rest as our own personal work-free spaces. Separating your professional brain from your at-home brain has grown to be extremely difficult for many, which is obviously understandable considering home and work have taken over the same space. 

Working from the couch or your dining room table without an actual office space and environment can be really difficult for some, especially if you’re sharing that space with family or kids. Now, people are realizing that we really don’t know when life will return to normal, so they’re yet again choosing to invest in their property. 

Market-wise, upgrading your home for one that has even just one more bedroom has never been more feasible based on current trends. Hot tip: if you’re a buyer looking for a new space where you’ll also be working-from-home, a portion of your mortgage can be claimed on your taxes as a home-office deduction. Talk with your real estate agent about the specifics with your area and potential new mortgage as well.

Selling Home and keys

Supply of Homes for Sale Slumps in December

The final month of 2019 saw a greater slump in real estate sales than previously anticipated by the market. With the holiday season in tow, December is never a popular time to list a home for sale – however this past month’s supply of homes for sale was 12% lower when compared with the same month in 2018, according to realtor.com. This was also a much steeper decline than the 9.5% drop witnessed in November.

As expected, the shortage of homes for sale has taken the biggest hit at the low end of the market, but the drain in supply is actually accelerating across all markets, including the most expensive properties. The end of the year saw the supply of entry-level home priced at less than $200,000 drop more than 18% annually, compared to the 16.6% drop witnessed in November. Midrange houses priced between $200,000 and $750,000 dropped 10.2% annually, compared with November’s decline of 7.4%, while the top end houses priced over $1 million reported a drop of 4.4% annually compared with November’s 2% slump. The median listing price on a U.S. home is currently just under $300,000.

While low-cost homebuilders are continuing to tap into a market of millennials – around 4.8 million of whom will be turning 30-years old in 2020 and looking to buy for the first time – the supply of houses being built and listed simply isn’t able to meet the sizable demand.

The drop noted in December suggests continuing unevenness in the housing market, with many predictions expecting historically low levels of houses for sale to come. December’s slump represents a loss of approximately 155,000 listings, compared to the same period in the previous year, and the amount of new listings is decreasing as well.

Embed from Getty Images

So what is causing this difficult time for the housing market? Higher prices are discouraging many potential movers from listing their homes; increasing numbers of older homeowners are choosing to stay where they are rather than selling their property; and a large number of investors have spent the past decade transforming previously sellable homes into rental properties, which has removed them from the market for prospective buyers.

Real estate is a local business however, meaning not all markets are encountering the same effects. While areas such as California, Seattle, San Francisco and San Jose all encountered a 30% drop in inventory in December, the major markets of San Antonio, Las Vegas and Minneapolis-St. Paul saw their supply of for-sale homes increase. This may appear to suggest that the struggling locations have simply faced an unfortunate year, but the problem is far more widespread than just a few bad districts.

Demand for houses will inevitably increase into the year. With mortgage rates still low potential buyers have greater purchasing power available, but this short supply is likely to push prices up across the board, and currently the majority of new homes in the U.S. are already on the mid to high end of the scale. While many builders are beginning to develop lower-cost properties, as well as ramping up production in general, it will likely be some time before their efforts begin to make a real impact across the market.

Embed from Getty Images

So what next for the housing market? If you believe the gloomiest predictions, the U.S. could be due for another market crash. Just like in 2008, slow wage growth has made it difficult for potential buyers to keep up with the rising house prices. Property sales are currently expected to drop by 1.8% this year, and it’s likely that potential buyers pull out as they struggle to afford the few properties on sale. Combined with a greater uptake of low mortgage rates, this does not paint a pretty picture for real estate. As sales decline, prices may follow – this could leave buyers struggling to make payments on houses that were too expensive for them in the first place.

This is a worst-case scenario prediction however. New homes are being built across the country and the rate is increasing – construction began on 1.37 million new homes in November 2019, a 3.2% increase on October’s numbers and a 13.6% increase on the same month a year prior. If these numbers are accurate and production is successfully ramped up, the construction industry may be able to alleviate the strain that the housing market is currently facing.

Right now, the best advice may be for prospective buyers to hold on to their cash. Low mortgage rates may seem tempting, but the lack of houses available will mean paying out an unjustifiable fee overall. The situation may improve further into the year as more and more properties are built, but if possible it’s worth waiting to see if the market steadies out over the coming years before making such a sizable investment.

Business Sales

How To Boost Your Business’s Holiday Sales

It’s always a happy holiday for retail businesses. Whether it’s a local boutique, or a major corporate chain, stores seem to flood with eager customers trying to cross off everyone on their shopping list. Businesses seem to thrive the most when it comes to holiday deals. As we grow older, the lists of gifts we need to buy seem to get longer and more expensive. So what can your business do in order to make your life, and your customers’ lives, the easiest during this holiday shopping season? 

Holiday marketing is extremely important for the success of any business regardless of the size of it, and in an age when technology is constantly advancing, a majority of that marketing is done online. Social media presence and an easy-to-navigate website are key in ensuring that your business remains successful, and also that people are able to find out about you. Especially if your business is at a local level, social media is the best way you can spread the word about your sales and deals to your customers and beyond. Additionally, if you have a website that allows for users to create an account or attach an email they’ll be able to stay more informed on everything going on within your business. 

Embed from Getty Images

When it comes to the holidays, however, you should be going above and beyond with your online presence. An amazing way to generate online traffic and customer engagement is by adding a wish list feature to your website. A wish list will not only give your customers the flashback of what it was like to write letters to Santa, but also makes the shopping experience so much easier for both of you. 

Wish lists in general allow customers to curate all of the products that they want for themselves, or need to buy for others, and have it be in one place for when they’re ready to buy. They allow the buyer to take their time and not feel the pressure of a growing online cart looming over them while they shop. Wish lists typically stay saved for a customer regardless of if they leave the website or not; normally this feature means that customers need to create some sort of user account that will save the list for them, however, accounts in general are also another amazing way to ensure that your customers are staying informed and updated with your store. 

Embed from Getty Images

If you do decide to add a wish list feature to your website, a crucial feature will be a “share” button that allows the customer to send their wish list to any of their friends or family. This feature will easily allow people to tell their loved ones what they’re looking to receive, or buy, making the entire shopping experience fairly simple. 

Wish lists are also extremely beneficial to the business itself. As the website’s admin, you’ll have access to every user’s wish list. This means you’ll be able to see the trends of what products customers are gravitating towards. Additionally, keeping the wish list feature active year round will give you an indication of seasonal shopping patterns and allow you to have a greater insight into what products are more in demand depending on the time of year. This information can be crucial for a business owner, as it indicates what supplies/products you may need to stock up on, depending on the time of year. 

Finally, another great feature that can be added to the wish list section of your website is a “recommendations” section. Depending on your website’s algorithm, this section can either show customers other products that your business carries that relates to what they put on their wish list that they might be interested in, or it could show users what products other customers are adding to their wish lists this holiday season. When shoppers see products that are popular, they’re more inclined to add them to their list, whether it be for themselves or as a gift. When it comes to gift giving this feature can be especially useful as it tells customers what products people are really loving that your loved ones may also enjoy. 

Making your online presence known is, in general, an amazing way to generate business. Adding on a special section for holiday wish lists not only makes the shopping experience that much easier all around, but also helps Santa know what everyone wants this year.

Holiday Open House

Setting Up The Perfect Open House For The Holiday Season

Selling your home during the holiday season can be quite difficult. The housing market in general is relatively low and with everyone buying gifts for all of their loved ones, acquiring new property can seem like the last thing on everyone’s mind. However, this shouldn’t discourage sellers, as there is massive potential in selling your home during the holiday season. One of the best ways for a property listing to gain traction is to hold an open house. The general point of an open house is to show prospective buyers the potential in your property for them. This is why “staging” the home is so important when hosting an open house. The staging process allows buyers to see the home as if it were move in ready and gives them a real idea as to what a life lived in that home could look like. What time of year says “there’s no place like home” better than the holiday season?

Staging a home with decorations for the holidays is the smartest way to give buyers a real vision of what it could be like if they were to move in. So hang the mistletoe, bake some cookies, and throw on the fire to really give potential buyers the “welcome home” experience. It’s basically like hosting a giant holiday party in which people can come and go as they please. 

Setting up a “buffet” style table of little holiday drinks and treats not only will attract individuals to your open house (who doesn’t love free food) but can also give them an idea of what it would look like to host a holiday party in their potential new home. Any standard long table will work as long as you have a relatively festive table cloth to drape over that. Accent the table with wreath embellishments, candles, tinsel, and most importantly, some cookies. There’s a ton of simple tips online on how to create holiday themed centerpieces for cheap. Basically, you want to act as though you’re hosting your families annual holiday party when it comes to the food display, and house display in general. After all, an open house at the end of the year is basically one big holiday party and the gift is your home! 

A really unique way you can advertise for your open house is to create holiday style “invitations” or flyers that you can post around town. Advertise it as a “Holiday Open House” people love a good theme for any sort of event. Slap on the fact that they’ll be cookies there and foot traffic will be booming. Even if the people who come just end up eating a few desserts and leaving, you never know who those people know in regards to who’s looking to buy a new home/property. So make your property open and inviting for all, that’s what the holidays are about after all. 

Speaking of making your property open to all, you want to enforce that it’s a “holiday” open house, and not just a Christmas affair. Christmas trees and decorations like that which are generally only associated with Christmas aren’t bad, as these are generic symbols of the holidays in general, but religious memorabilia should in general be kept at a minimum, however, being inclusive to all holidays in terms of decorations doesn’t hurt either! 

If your property has a fireplace, definitely light it up, as well as some holiday scented candles. Engaging clients senses is always a smart way to engage buyers during an open house and truly give them a sense of “home”. It’s why real estate agents often put a ramekin of vanilla extract in the oven to mimic the process of baking cookies. You want buyers to already view the property as theirs before they even see all of it. 

Play some holiday music as well to really set the mood. Going with a classical piano holiday playlist is the best way to have the holidays engulf a space without being the main focus point. Instead, the combination of simple piano, good food, warm temperatures, beautiful decorations, and balsam smells will make prospective buyers feel like guests in their potential new home, as opposed to just clients being shown a product.