May 27, 2020 By Ryan Lundquist
Excerpts: What are prices doing? That’s the question I’m getting asked the most. Here are some thoughts about how to look at prices during the pandemic. I also have two brand new price visuals.
1) Eggs in one basket: I recommend watching multiple price metrics instead of putting all our eggs in one basket. So in addition to the median price we can watch the average sales price and average price per square foot.
2) Pure pandemic data: When May stats come out we’re likely going to see 80-90%+ of those sales having gotten into contract after mid-March when the pandemic began to affect us. Thus May sales will be a stronger indicator of pandemic trends than April sales.
3) Seasonal rhythm: It’s key to understand the seasonal rhythm of the market because it helps us spot what is normal and not. For example, the median price usually increases from March to April, but this year we saw the median price dip instead. What does this mean? We need time to understand it. For now we’re recognizing something has happened that is less common. It’s worth noting we often see the median price climax around May or so, which means if we see prices soften in coming months we’re going to have to ask whether it’s a seasonal thing, pandemic thing, or something else.
For more info and of lots of graphs click here
My comment: My big article on Fannie COVID changes, including recommended “disclaimers”, is in the June paid newsletter. See excerpts in the ad below. You MUST discuss market conditions in your appraisal. Ryan’s blog post, and his other posts, give you some good ideas of what to include.