Pegi Dillienzo had just put his Corona del Mar home for sale when he heard the news that two passenger-filled commercial jet liners had crashed into the World Trade Center in Manhattan.
When I saw the stunned world astonished, the Twin Towers collapsed and panquered into a pile of rubble.
Equally soon, the country’s housing market also seemed to collapse.
Dillienzo, an agent at Douglas Elliman’s luxury brokerage firm, bought a home in the Irvine Terrace district of Corona del Mar with a business partner for remodeling and flipping.
Now it’s just on the market.
In a hurry, Dillienzo and her partner jumped at the first offer they got.
Those early turmoil spread throughout the Southern California housing market, causing a four-month slowdown in sales. After that, the market awoke and homeowners moved away from the city center, resulting in double-digit sales growth. It was no different from 2020, when the market froze due to the pandemic blockade and then suddenly exploded.
“The catastrophic events we’ve seen are horrifying,” says Peter Hernandez, president of Douglas Elliman California. “People want security, so whether they’re buying $ 100 million in real estate for the ultra-rich or first-time buyers, they’re pouring money into real estate.”
Run away from the city
In the months following the attack, the dense downtown center became unpopular. Very similar to the coronavirus pandemic, people fled to resort towns and other less densely populated areas.
“People couldn’t get out of town fast enough,” says Arnie Carswell, a senior agent at Douglas Elliman California. “Palm Springs is booming! Laguna Beach is booming! Santa Barbara is booming.
“People want to go to the ranch Ojai Valley and Lake Arrowhead because of the virus.”
Another common factor between the two chaotic events 20 years apart was the stimulus of the federal government.
In 2001, the economy was sluggish due to the collapse of dot-com. However, according to Oscar Way, Deputy Chief Economist of the California Real Estate Association, the resilient Southern California housing market will soon recover and experience a 15-16% year-on-year increase in sales.
Just as sales fell shortly after the pandemic was closed, so did sales in the months following the attack.
At both events, the Federal Reserve intervened, lowering interest rates and boosting sales.
“Once we’ve overcome the first shock of what happened, I think it’s back in business as usual,” says Jeff Lazerson, president of Mortgage Grader and a longtime contributor to the Orange County Register columnist. “There was a big refinancing boom here in 2002. After that, 2020 will break the 2002 record and 2021 will probably be somewhere in between.”
The average monthly mortgage rate for September 2001 was 6.82%, and the average home price for Southern California homes was $ 236,000.
Market watchers didn’t know what would happen to home sales in the weeks following the attack.
“It’s hard to predict how the tragedy of two weeks ago will affect home sales,” said Mike Ella, then president of DataQuick. However, due to stable demand in the region and low mortgage rates, it is quite possible that the market will start again. “
And they will. While mortgage rates fluctuated, home sales surged in 2002 and eventually fell to 6% by December 2002.
“It looks like many moving buyers are back in the market towards the end of the year,” Ella said. “Many of them were buyers who put their plans on hold after 911. Their activity peaked December median in all Southland counties, with regular year-end surges in new home sales. I pushed it up. “
Twenty years later, the region experienced similar dips and rebounds. By May 2020, Southern California’s housing market had a year-on-year decline in sales for the fourth straight month., Transactions closed decreased by 45%.
“It felt like the real estate market was off like a faucet,” says Steve High, Villa Real Estate Partner and President of the Newport Beach Office. This buying frenzy began with this idea of those who want a home for a multi-generational family. “
In December 2020, the average monthly mortgage rate reached a record low of 2.7%. It’s still less than 3%.
House hunters have hit the market with a frenzy that hasn’t been seen since the months leading up to the Great Recession. By July of this year, the median homes in Southern California had reached a record high of $ 681,750, a surge of $ 102,000 in 12 months.
“There were people who needed to change their living conditions,” says Billy Rose, founder and vice chairman of the agency. “As we got deeper, people began to realize that life could last, and they focused and reassessed what the house meant to them. It was then that the boom began to occur. It’s a simple supply and demand function. There was a lot of demand and there wasn’t much supply. “
In the chaotic aftermath of 9/11 and pandemic lockdowns, people ‘pour money into real estate’ – Press Telegram Source link In the chaotic aftermath of 9/11 and pandemic lockdowns, people ‘pour money into real estate’ – Press Telegram