Where We Are Now: March 19, 2020
Work From Home — Day 4 — More Stimulus from Fed to Follow — 5:55AM
Team –
The markets are struggling to rebound and could again open in the red. We all anxiously await final economic stimulus package from the Feds. Hopefully they outperform our expectations.
Last night, dinner conversation migrated to best sources for the facts on cases, etc. This interactive John Hopkins University map, updated several times a day, tracks cases by geography, as well as recovery rates and deaths. An exceptional fact-based source of information: JHU CSSE. Here is a mobile version as well.
The day of the iBuyer has certainly come to a halt. It will be curious to see what will happen to the iBuyers current inventory. No one predicted these economic conditions when the iBuyers’ algorithms priced thousands of monthly acquisitions.
We will be back to you with plenty of facts and stats on closings around 5PM today.
Enjoy your morning coffee or tea. Take a walk! Enjoy sunrise!
Thanks!
Mark
Mark A McLaughlin
WFH — Day 4 — New Bookings and Cancellations Reports — 5:30PM
Team –
The first day of Spring generally marks the start of the housing season. Something tells me this season will be different, actually deferred! Unlike airline seats that fly empty, our inventory is a fixed asset. Demand can at times get pent-up, but then it comes snapping back!
If you did not see this morning’s Economic Outlook – check it out – its awesome!
These links will permit you to review the recording of this morning’s Economic Outlook. Another alternative is WorkPlace. The video starts at minute 1:15.
Here is my take on our current state and a future lens:
- We have been surprised by the sustained consumer confidence through the development of the coronavirus.
- What we do not have yet is the visibility into the impact of pending employment workforce reductions (layoffs).
- If these are significant, there will be three impacts to our markets:
- Reduced capacity for Buyers to qualify for loans [reduced demand].
- Additional inventory from those who need to sell homes as a result of job loss [increased supply].
- In the high-end [$5-$10 million plus] buyers’ appetite will be influenced by the selloff in the equity markets. Prices will likely soften!
What does our future look like?
First, we need to get back to the people-to-people part of our business (will this be 45 days). This is what we live for and what we are best at! Second, we will need “comps” as the market cranks back up. The bravest Sellers will “set the comps” and then the market will react, much like the futures or first trades in the equity markets.
Here is a snapshot of our business in the first 15 days of March 2019 vs. 2020. You will notice new units booked (sales entered) up 28% and closings rising at an increased pace of over 20%. Cancellations are on the rise, although a relatively small number, at 150% of 2019 pace.
| 2019 Properties | 2020 Properties | % Change | 2019 ASP (in $M) | 2020 ASP (in $M) | % Change | |
| Sales Entered | 304 | 388 | 28% | $ 1.74 | $ 1.68 | -4% |
| Sales Closed | 330 | 399 | 21% | $ 1.64 | $ 1.70 | 4% |
| Cancelled | 22 | 55 | 150% | $ 1.48 | $ 1.50 | 2% |
The links below take you to more specifics in NorCal and SoCal. Again, you will notice a nice pace of pendings converting to closings. This is a really solid sign in this market. People truly love acquiring their own special homes. The SoCal charts also includes bookings and cancellations for Chartwell Escrow.
Today’s Update: Click Here for NorCal, Click Here for SoCal
This is a time where our professional staff will rise to greatness. This is the time where your leadership with your clients will make a difference and you will win “clients for life,” maybe again!
See you on WFH – Day 5!
Thanks!
Mark
Mark A McLaughlin