Video Transcript below:
Well it's April and I have the latest
figures and news to share with you to
keep you up to date with what's
happening in the market, both
nationally and here in Spokane. My name
is Phil Wells i'm a real estate agent
who takes the time to keep up to date
with the market and I want you to be as
informed as possible too.
In this video we're going to take a look
at the pending home sales from February
as well as mortgage rates and loan
applications. We'll also take a look at
real estate articles that stood out to
me recently. We'll then try piece it all
together at the end figure out what it
all means and see we can predict where
the market's heading. So let's get into
Looking first at pending sales for
existing homes in February. So why do we
look at pending sales rather than closed
Well it takes about 30 to 45 days to
close a transaction
so if we were looking February's
we'd be looking at market activity from
December or January
whereas pending home sales in February
give us the most up-to-date impression
of where the market's heading.
A pending home sale is exactly what it
sounds like, it's a home that's had an
offer accepted or in some other way has
up in escrow waiting to transfer
ownership. Nationwide contract signings
10.6% compared to January and when
compared to last February
contract signings fell 0.5%. Where
i am in the Western Region,
contract signings fell at 7.4%
compared to January this year
but were up overall 1.9% compared to
February last year. The National
Association of Realtors chief economist
summed it up like this,
"the demand for home purchases is
widespread, multiple offers are prevalent
and days on market are swift, but
contracts are not clicking due to record
inventory." What this man is saying
reflects almost exactly what i'm seeing
here in Spokane.
New listings are attracting outsized
attention even on homes that 18 months
ago wouldn't have been that desirable.
But there just aren't that many
transactions happening because there
aren't that many homes out there to buy.
If there were more homes available for
sale in my opinion home prices would
stop rising so rapidly
and there would be more transactions
taking place each month. Looking now
at mortgage rates. So everyone has been
hit by radio and tv ads saying that
interest rates are "near record lows".
Notice that change in verbiage, "near
record lows". It used to be "at record lows".
So what's actually been happening with
Sticking with February for a second we
started February with mortgage rates for
the 30-year fixed mortgage
being 2.79% and at the end of February
they were 3.27%.
That's nearly a 0.5% gain over a
one-month period -
in the mortgage world 0.5%
gain is huge. I am
able to give you up-to-date figures for
mortgages - as of April 7th (today when i'm
interest rates are 3.34%. So it's plain to
see that sub 3%
mortgages are on their way out and will
this have an impact on the market? We'll
have to wait and see.
Sticking with mortgages let's look at
loan application rates. This is a huge
leading indicator when it comes to the
because it doesn't matter what rates are
if nobody's applying for a loan.
Let's head over to the Mortgage Bankers
Association the MBA
to see what the experts are saying right
now. Joel Kan is an associate vice
president at the MBA
and he said, "after seven consecutive
weeks of increasing mortgage rates
the 30-year fixed rate declined
three basis points to 3.33%,
which is still almost 0.5%
higher than at the start of the year
(which we highlighted before) mortgage
applications for refinancing and home
both declined but purchase activity was
still convincingly higher than the
pre-pandemic induced drop
seen a year ago as well as up six
percent from the same week in March 2019.
He continued by saying "many prospective
home buyers this spring are feeling the
effects of higher rates
and rapidly accelerating home prices.
Record low inventory
is pushing home price growth at double
the rate from a year ago
and even above the 10% growth rates seen
The housing market is in desperate need
of more inventory to cool
price growth and preserve affordability".
Now throughout this article here's the
point that really stood out to me,
"higher mortgage rates continue to shut
down refinance activity,
as the pool of borrowers who can benefit
from a refinance
further shrinks." In my opinion the
ability to refinance at a really low
sub 3% rate has been one of the key
factors for people not listing their
homes for sale.
There are other factors of course out
there like the low inventory to choose
from when you do sell.
But with it becoming less desirable to
refinance and there's still a huge pool
of potential buyers out there
are we gonna see more people choosing to
sell in summer 2021?
Who knows. Now i wanted to take a brief
look at some news articles that stood
out to me recently.
So just looking here at Redfin we can
homes sell at the fastest pace on record,
more homes ever selling above their
a record of 39% homes sold above list
bidding wars surpassed 60 in February as
the housing shortage fuels fierce
Yep let's take a look at one of these
articles. Straight away the things that
jump out to me
on this article, new listings of homes
for sale were down two percent from the
same period in 2020
and down 5 from the same period in 2019
active listings fell 42 from the same
period in 2020 to an all-time low
59% of homes that went under contract had
an offer accepted within the first two
weeks on market
47% of homes had offer accepted
within the first
week. 41% of homes sold for more than
their list price.
So we can see this really supports the
data that we've highlighted so far.
Buyer demand is strong prices are up and
inventory is down.
Looking now at my local market, Spokane.
Fortunately we get data here really
quickly in Spokane, so looking at the
closed transaction data is actually
really valuable here. So let's take a
quick look and see how what's happening
locally compares to what's happening
Here in Spokane sales are actually up
average prices are up 20.7%
medium prices are up 17.9%
inventory is down and distressed home
sales are down as well.
Other than sales actually being up
reflects exactly what's happening
We've got a low inventory, prices are up,
things are selling quickly - you can see
we've only got 11 day supply here of
properties in Spokane.
As soon as things do hit the market here
they're getting under contract pretty
Now let's try piece all this together,
make sense of it and try to figure out
where we're going.
We have a reduced number of pending home
sales nationally, we have a majority of
listings going under contract above
asking price within the first two weeks,
fewer active listings and fewer new
listings as well.
All this points to one key factor
causing an imbalance in the overall
As the economist from the National
Association of Realtors said we clearly
have a supply issue here.
More homes for sale are needed to
balance out this market and to satisfy
built up buyer demand. Like I mentioned
earlier it is possible that
rising interest rates will take away the
incentive for home buyers simply to
and just sit on a sub 3% loan for many
years. Alternatively those that could
have benefited from the low rates
already have and
are prepared to just sit on that rate
for many years. I'll be watching this
very closely for the next few months to
see what does happen. That's it for this
video. I hope you gained from this video
if you did
please give me a like and subscribe as
well, that really helps me out. If you are
in the Spokane area and looking at
listing your home for sale
please get in contact with me and i'd be
honored to work with you. Until the next
one thanks for watching.