Entering this year, the biggest challenge we were prepared for in the housing industry was inventory, literally not enough homes on the market for the number of people that wanted to buy those.

So, if we take a balanced market of six months and we look back to 2007, we know there were just over eight months of supply of inventory on the market leading us to above six months being a buyer’s market and below six months being a seller’s market. 

Today, we’re at 3.1 months of inventory on the market. We literally don’t have an oversupply of homes on the market for people that want to buy them, much different. Oversupply led to the issues that we went into 2008 and faced as an industry.

The next thing we want to look at is home equity and how consumers are using their equity then and now.  This gives a really good picture of 2008 and the three years leading up to 2008 you see on the left side of this image. Eight hundred and twenty-four billion dollars was cashed out as cash out refis during that time. 

We know the three years leading to today that number is 232 billion, a fraction of what it was back then. 

Back then, people were using their homes almost as an ATM, taking equity out of their homes, putting it into depreciating assets, buying vacations, going on trips, doing things, financing lifestyle thinking this is never going to end. This shows you how consumers are treating equity today, and it’s very different than 2008. 

What we also know is that 53.8 percent of all the homes in this country have at least 50 percent equity. We know that because 37 percent of the homes are owned free and clear, and then when you take the remaining homes, 26.7 percent of those have at least 50 percent equity, which gives us this number of 53.8 percent of homes have equity, a very different position than 2008. 

In 2008, when we had homes leveraged to the hilt, that home loses a little bit of value and you literally owe more on the home than what’s it’s worth, people walk away. 

People aren’t walking away today with the equity they have in homes, $50,000 or $100,000 of equity in their home. They’re going to stay there, and they’re treating their homes very, very differently than what we saw in 2008.

The percent of median income needed to purchase a median-priced home, and what we know pre-bubble is that number was a lot higher than what it was today. 

Back in 2006, just over 25% of someone’s income was dedicated to their home and their housing need.  Today, that number is just under 15% of income dedicated to the housing need, and we know again, a very different picture.

There’s a lot of confusion out there. We do have one challenge that is, and that’s the job loss. Ten million people lost their jobs the two weeks before Tuesday April 7th.  Now, we're going to take a look at those numbers in a little deeper context. 

This is what of the first 700,000 let’s take a look at who they are:

• Number one, 59.5 percent are food service and drinking places, meaning they’re servers and bartenders. When the restaurants open back up, all of them go back to work immediately. 
• Construction workers at 4.1%, the new construction was finally starting to take off, and all of a sudden, they got hit with supply chain issues, etc.  Those people will be back to work.
• Healthcare office workers at 6.1%, meaning office workers in dentistry, specialty offices and doctors offices - they’re all going to go back to work. 
• Childcare workers (2.7%) will be back to work.  If we're spending three months or longer with our kids at home, we’re definitely going to want to get the childcare workers back to work. 
• Temporary help services (7.1%), well, obviously since a business is not working all the people that work in the temporary services to help that business staff itself, they’re gone. 
• Retail trade (6.6%), all the stores are closed. Once they open back up, those people come back in.
• Lastly, the accommodation industry at 4.1%, the hotel industry, and obviously they might not rush right back in, but they’ll be back in. 
• All the other jobs not in those categories make up 9.8 percent of the 701,000 that were originally laid off.

So, we can see that the vast majority, over 90 percent, will likely get their jobs right back, but again this report was done on March 14th. 

So, it doesn’t include the second half of March, and many of the ten million were in the second half. Will they be the same type of workers? No, not exactly, but that data will not be out until May 8th.  But understand that the vast majority of the people laid off are going to come back to work, and we’ll go back to the V-type type of recovery.

The headlines are going to be ugly about the unemployment rate on May 8th, actually the unemployment. Yeah, the May 8th unemployment rate will come out. It will be ugly. The Labor Department numbers on how many people are losing, collecting unemployment that number is still going to be ugly.

Take a look at the graph to the left.  Going all the way back to 1989, and what we see is there is no direct relationship between the unemployment rate and the number of houses sold, and we give you three instances of that.

1. First, in the early 1990s, the unemployment rate went up to 7.5 percent. Home sales continued to increase. 
2. In the early 2000s, the unemployment rate went up to six percent, and home sales continued to increase somewhat dramatically. 
3. Then when the housing crash occurred, the unemployment rate shot up to 9.6 percent, and yes, home sales fell, and we're sure that has a major piece to do with it, but also understand that was also the time when the banks just shut off lending. Even those we knew were mortgageable, couldn’t get a mortgage because the banks were so tight in their new standards.

For the last many years, the unemployment rate has been dropping like a rock, but look at home sales. They remain flat. So, really, there’s not a direct correlation. We understand that unemployment could have an effect, and we’ll look at that effect as we look at how many people, in fact, do lose their jobs. And we’ll look at who those people are and how quickly could get those jobs back.

In the Town of Plymouth, home sales continued to increase through the month of April. Buyers are still actively securing homes despite the necessary precautions put into place during the COVID-19 pandemic.  

Homes are still entering the market however, the number of new offerings decreased in April vs. March.  Homes are taking slightly longer to sell as we navigate through the global pandemic, the average days on market increased from 75 in March to 98 in April.  The Average Sale Price increased in April vs. March by $23,000.

In the Town of Scituate, the Average Sale Price increased by $52,000 in April.  Homes are selling much slower through the month of April, up from 85 average days in March.  The number of homes SOLD also decreased in April which shows a slowing market however homes are still entering the market. 

In the Town of Kingston, available inventory has increased slightly however there has been no significant changes.  The Average Days that homes spent on the market increased. The Average Sale price has decreased into the mid $400,000s.

In the Town of Norwell, the average days on market decreased from 87 in March to 46 in April showing a strong sellers market.  There is still a lack of available inventory as we're continue into the Spring.  The Average Sale Price has continued to remain steady month over month.

In the Town of Hanover, the number of homes SOLD have increased slightly in April.  The Average Days on Market significantly decreased from 136 in March to 81 in April which indicates an uptick in the market in Hanover.  

In the Town of Hull, the number of homes SOLD has decreased slightly in April.  Buyers are still active however, with a lack of inventory buyers don't have much to choose from.  Homes remained on the market for a much shorter time than they did in March (111 days).  The Average Sale Price has increased by $113k.

In the Town of Sandwich, the Average Days on Market have continued to increase while the number of homes SOLD have decreased. The Average Sale Price has remained fairly consistent from February through April - remaining in the mid $400,000s.  Available inventory has slightly decreased from March.  This indicates that fewer Sellers are still motivated to place their homes on the market during the Spring market.

In the Town of Falmouth, the Average Sale Price has decreased from $1.2 million to $679k in April.  The number of new homes entering the market in April was down by 50% compared to March which indicates that Sellers are holding off from putting their homes on the market during what is typically the hottest time of year to sell. The number of homes SOLD also increased indicating a that Buyers in the Falmouth market are actively looking and securing housing even with COVID-19 precautions in place.

In the Town of Yarmouth Port, property sales are down by 50% in April.  The Average Days on Market have decreased significantly since March however there is a lack of new inventory entering the market which will likely cause the average days on market to rise again.