Everyone is wondering what will happen to the housing market due to COVID-19. We certainly have seen a temporary drop in activity, but the housing market is not static. Business continues to be conducted in our local housing market in the Sarasota area.
You can certainly find doomsayers on the Internet as you always can. The truth is this is not 2008 all over again. Far from it. Yes, we are experiencing a slowdown, and many of those of us working in Real Estate believe the housing market will re-surge fairly quickly once the crisis begins to pass.
According to the S&P CoreLogic Case-Shiller National Home Price Index, home prices have continued to rise at a modest level:
“Importantly, today’s report covers real estate transactions closed during the month of February, and shows no signs of any adverse effect from the governmental suppression of economic activity in response to the COVID-19 pandemic. As much of the U.S. economy was shuttered in March, next month’s data may begin to reflect the impact of these policies on the housing market.”
Fannie Mae’s Housing Forecast released this month has home prices flattening out through 2021. According to the forecast, the median home price for Q1 2020 was $265,000 and will be the same in Q1 of 2021. This summer prices are expected to rise slightly and then come back down in late fall – the normal changes we see throughout a given year. Fannie Mae Housing Forecast
Freddie Mac’s April 2020 Economic and Housing Market Outlook has home price growth flattening through the remainder of 2020 and then rising slightly in the 2nd quarter of 2021. Importantly the report predicts the number of homes sold will only be slightly down compared to last year. Freddie Mac Outlook
What else are the experts saying about the future of the housing market and home prices? Read on to find out.
NAR’s survey found the 3 out of 4 Realtors say their sellers see the pandemic as a temporary problem that will pass – and they’re not panicking and discounting asking prices.
WASHINGTON – Looking for a good deal on a new home? Keep looking.
According to a new survey from the National Association of Realtors®, nearly 3 in 4 Realtors currently working with sellers this week – 74% – reported their clients haven’t reduced listing prices to attract buyers. This suggests interested home sellers are remaining calm and avoiding panic selling during the uncertain economic environment brought about by the coronavirus pandemic, according to the organization.
“Consumers are mostly abiding by stay-in-shelter directives, and it appears the current decline in buyer and seller activity is only temporary, with a majority ready to hit the market in a couple of months,” said NAR Chief Economist Lawrence Yun. “The housing market faced an inventory shortage before the pandemic. Given that there are even fewer new listings during the pandemic, home sellers are taking a calm approach and appear unwilling to lower prices to attract buyers during the temporary disruptions to the economy.”
NAR’s latest Economic Pulse Flash Survey – conducted April 19-20, 2020 – asked members how the coronavirus outbreak has impacted the residential and commercial real estate markets. Several highlights include:
- More than a quarter of Realtors – 27% – said they were able to complete nearly all aspects of transactions while respecting social distancing. The most common technology tools used to communicate with clients are e-signatures, social media, messaging apps and virtual tours.
- Residential tenants are facing rent payment issues, but many delayed payment requests are being accommodated. Forty-seven percent of property managers reported being able to accommodate tenants who cannot pay rent, a 6% increase from a week ago. Nearly a quarter of individual landlords – 24% – said the same, unchanged from last week.
- Existing-home sales fell in March following a February that saw significant nationwide gains, according to the National Association of Realtors. Each of the four major regions reported a dip in sales, with the West suffering the largest decrease.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 8.5% from February to a seasonally-adjusted annual rate of 5.27 million in March. Despite the decline, overall sales increased year-over-year for the ninth straight month, up 0.8% from a year ago (5.23 million in March 2019).
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” said Yun, NAR’s chief economist. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
Source: Fort Worth Business Press as quoted by the Realtor Association of Sarasota and Manatee Counties.