gmhTODAY 31 Winter 2021 Winter 2021 | Page 10

State of the Market Address

By Sean Dinsmore
Top Producing Team Gilroy Intero , 2015-2018
Sean Dinsmore , Realtor Intero Real Estate Services www . TheDinsmoreTeam . com 408.710.2855 DRE # 01966405
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It ’ s been a wild year for all of us , to say the least . And the real estate market has been no different . Here ’ s a recap of the year , where we ’ re at now , and what we can expect going forward . The first two months of 2020 were white-hot ; I hadn ’ t seen anything like it since 2017. Then , when we were all issued shelter-in-place ( SIP ) orders back in March , a lot of people rightfully asked me “ How is this going to affect home prices in our area ?”

I let them know that nobody really knows what ’ s going to happen in the future , but I am happy to give them my best estimation . I told people , “ I foresee two scenarios — either sellers are going to flood the market as soon as SIP is lifted , and prices will subsequently start to decline , or buyers will come out in earnest , faster than sellers can list their homes , and prices will start to increase .” During March and April, most homes were pulled from the market , and few new homes came on the market
. A lot of bargain hunters were out telling active sellers or soon-to-be-sellers , Oh the market is going to crash from Coronavirus , we want a discount on your home
.” Sellers didn ’ t flinch . What I saw over this period were off-market sales , and these prices were higher than market value at the time of SIP . Once SIP lifted , and although open houses were not allowed and showing restrictions were heavy , buyers came out guns-a-blazing . Sellers , meanwhile , took a step back , unsure of their situation
. Those who had plans in place to move ( mainly , out of state ), have since listed their homes . Others , though , who were optionally moving , tended to put their plans on hold until this situation stabilized . Buyers needed to buy , but sellers didn ’ t need to sell .
The result ? Inventory has been very low since SIP was lifted . Both Gilroy and Morgan Hill have hovered between 30-40 homes actively for sale at any given time , whereas typically they peak around 120 toward the end of summer . Even during the regular slow months , the market remained piping hot . We ’ ve seen approximately 10 % appreciation in the months since SIP was lifted . If you were a seller during this time , you were happy . If you were a buyer , you have endured some frustration . Now the question , what can we expect going forward ?
At the time of this writing ( early-to-mid November ), inventory remains low and the market remains hot . What is typically a dead time of the year during the holidays is anything but thus far . Sales in Gilroy are slightly behind pace in November ( compared to the previous 5 months ), but Morgan Hill is right on track . Whether this persists through the holidays is anybody ’ s guess , but it wouldn ’ t surprise me if it did , as buyer demand is that pent up . I would suspect that this hot seller ’ s market will continue until at least near the end of quarter two , 2021 . For sellers , the choice is clear : cash out now ! For buyers , the situation is a little murkier ; do you wait and hope that the market softens , or do you get something now before the market goes up another 5 %? I ’ ve given my buyers the same advice : don ’ t try and time the market , as it rarely works out . If something comes along that you like , figure out what it ’ s going to take to get it , and if you ’ re comfortable with the monthly payment , get it now .
So , there you have it , 2020 real estate in a nutshell . Everybody be safe and enjoy your holidays . It ’ s good to have you reading us again !
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GILROY • MORGAN HILL • SAN MARTIN WINTER 2021 gmhtoday . com