I’m discussing how coronavirus has affected the stock market and the real estate market.
What’s going on in our Madison real estate market, and how has it been affected by the issues both nationally and abroad?
Certainly, one of the biggest affairs happening right now is the coronavirus pandemic. I’m not a physician; I can’t give you the best recommendations on how to protect yourself from the virus, but I can provide sources. Centers for Disease Control (which updates five days a week at noon) and World Health Organization are two of the best sites to check out if you want more information about coronavirus. There is a ton of noise out there about this pandemic, so please check these trusted sources before you believe rumors going around.
What does coronavirus have to do with the real estate market? According to Freddie Mac, in late February and early March mortgage applications were up 10% from where they were a year ago. The virus has caused a huge panic in the stock market, the market has had major drops and recoveries recently, back and forth. At 1:40 in the video above you can view a graph that shows what the stock market did during the past five major health outbreaks, including Zika and Ebola.
Looking back, the market fully recovered and then some. The market reacting to health crises is routine.
At 2:25 in the video above you can see what happens to interest rates over the years, starting in 1972. For almost 50 years the 30-year mortgage rate has moved in unison with the 10-year treasury rate. Interest rates are dropping, so this may be a great time to refinance or purchase a home and have the lowest rate in recorded history, which was reported this past week. Locally, the rate is at 3.25% for a 30-year fixed mortgage right now.“
What’s happening locally? Dane County has a current inventory level of 1.43 months. Six months of inventory means a balanced market, where neither sellers nor buyers have the upper hand. So we’re currently in a severe seller’s market with inventory this low. Almost half of the current active inventory is under contract. Madison is at one month of supply, and the surrounding communities vary between one month and just over two months.
The market’s moving quickly; there’s more demand than there are houses. This should continue to push property values up.
If you want more details about a specific Madison area community you can follow this link. Here you can see the average sale price, inventory, what type of market it is, and more. If you want more detailed information on any of the communities listed, please contact me, I can provide you with that data.
If you have any questions or are considering buying or selling, reach out to us. We’re here to help.