Deer Park Neighborhood After Covid-19
Navigating these uncharted COVID-19 and subsequent economic waters will leave some sellers and buyers sitting on the banks, while others take the risk and shoot the rapids. Deciding to buy, sell or hold during the pandemic and accompanying economic free fall will depend on circumstances and events that are entirely specific to the individual. The unique events may be triggered by a job change or loss, the passing of a family member, or a growing family.
Buyer and Seller Behavior
According to most medical experts, a viable vaccine will not be made available until 2021, although human trials are already underway. As a result, consumer behavior is likely to take a cautious approach to resuming pre-Covid-19 social and purchasing behavior.
Life Events Will Continue
There are a variety of events that will continue to impact consumer behavior regardless of pandemics or economic downturns. Chief among them are the need for a larger home for growing families, a job transfer, or downsizing into a more affordable home.
Looking Back to Look Forward
From an economic standpoint, we can look back to the Great Recession of 2008-2009 for insight.
The Great Recession was driven primarily by risky subprime mortgage-backed securities and its impact on mutual funds and other securities globally. Financial malfeasance and according to some, greed, created the economic collapse.
One would be cautioned in drawing definitive comparisons as to how the real estate market will react coming out of a Shelter in Place environment. However, the real estate market continued to function.
Deer Park Zip Code Held Steady
During the Great Recession there were a number of zip codes where the real estate values did not plunge. The inside the Waterson Expressway zip codes where home values held steady were 40204, 40205, 40206, and 40207. As the Great Recession waned, homes in these zip codes steadily increased in value while some zip codes were caught trying to make up ground.
Deer Park Neighborhood Statistics
This infographic illustrates the sales data for 2018 and 2019 single family homes in the Deer Park Neighborhood.
View homes that have sold in Deer Park in 2020.
Home Sellers Will Have to Adjust
Deer Park neighborhood home sellers will have to adjust to a market that came upon them suddenly. Bloomberg reports that U.S. jobless rate could exceed the Great Depression. How many of those jobs will be available when the work force can safely return to work is unknown. The number of unemployed obviously affects the pool of home buyers.
The smaller the pool, the less demand. Less demand could mean lower offer prices. In 2019 the average sale price for a home in Deer Park was $1,488 less than the asking price. Concessions are not factored into that number. We’ll have to wait and see how 2020 numbers stack up.
According to Keith Swisher, president of Statewide Mortgage, “a factor affecting the buyer pool are programs designed to help buyers with lower credit scores are steadily going away.”
Marketing Your Home
Preparing your home to show takes work in a perfect world. Keeping your home stocked with hand sanitizers and bleach cleaners will be part of your new regime. Wiping down door knobs, and counter tops before and after showings are essential for keeping you and your family safe.
Marketing your home should include:
- Virtual home tours.
- No open houses.
- No overlapping appointments.
- Hand sanitizers at home entry.
More Days on Market
Homes filled with shoppers at Sunday open houses and overlapping showing appointments are, for the foreseeable future, out of the question. The new routine of showing houses will slow the shopping experience. That’s not to say your home will not sell fast if it is price right and move-in ready.
More Days to Close
The closing process will take longer. Every aspect of closing a sale will take longer. It’s not just the time that the lender needs. Sellers and their agents will need to pay extra attention to the timing of the various real estate professionals and trades that will need to have access to your home. This means good communication and vigilant sanitizing.
Components of the closing process that will contribute to getting a sale complete include:
- Home Inspector
- Bug Inspector
- Radon Testing
- Tradesman as needed for agreed upon repairs.
Leveling Off of Home Prices
The great recession thwarted a solid six year run up of home prices before home prices started to slow in 2006 and 2007 and before the bubble burst in 2008. Ultimately hitting bottom in February of 2009.
In 2014, Forbes compared home sales eight years after the real estate market was at its apex in 2006.
Deer Park as an Outlier
The quality of the housing stock in Deer Park, its location, historic low interest rates, and demand for homes in an area with high walk scores are reasons to be optimistic about the future.
The Shelter in Place has made future home owners appreciate the value of a home. Especially a home that might afford a home office space in a neighborhood that can easily be walked.
Pricing Your Home
Amazingly the market is still super hot thanks in part to the low inventory. Yes it’s still a seller’s market. If you’re contemplating selling, it is critical that you price your home at a compelling price.
Bidding wars are still happening. Two of our listings had multiple offers after just one day on market.
Don’t use a comp that is not the norm for the neighborhood just because it was a high price. If you’re on the market, price reductions need to be needle movers. Incremental price reductions will not get you noticed and only add to your days on market.
Although it is a sellers market, win-win negotiations on price and repair request will get you to the closing table quickly.
The Last Word
Many economists see our recessionary position to be a mild one and say that it will have a V curve relative to a rebound. For comparison the Great Recession was a U curve with a longer period at the bottom and a slower rise to full economic vitality.
The economic forecasts are constantly changing as the projections for how and when Americans can return safely to their jobs.
Most real estate professionals seem to agree that resort, gambling, and vacation locations around the country will be hit hardest. Realtor has a deeper look into these projections.
No one has been here before, we can only use history to help guide us as we look forward to returning to a strong economy and greater social mobility.
We in the local real estate industry are optimistic that the Louisville market will hold steady as evidenced by the average sale price through March 2020 compared to 2019 is up 7,71% and the number of days on market is down 4%. Both of those trend numbers are good news. April numbers will be posted as soon as they are available.
Check back as we will be updating information for the Louisville market and the Deer Park neighborhood.