Market Snapshot
We live in “interesting” times, to say the least. Some trends may be temporary—such as many buyers seeking homes well-suited to working remotely—but how real estate is conducted may possibly be forever changed. Attention to health and safety have impacted how we buy and sell homes. But are people letting too much fear hold them back from participating in the housing market?
According to a recent press release from Zillow, web traffic to For-Sale listings online has risen to levels comparable to past spring markets. Showing Time recently published that scheduled showings, both virtual and in-person, have been increasing week-over-week since mid-April. This rebound is a 39% growth from the decline two weeks prior.
Are potential sellers aware that buyers are out there? According to an article by Adam Wiener, Chief Growth Officer at Redfin, for the seven days ended May 10, demand was 5.5% higher than it was before the pandemic, on a seasonally adjusted basis. He further purports that new listings have increased every week for the past four weeks – yet inventory is down 24%!
The shift towards remote work will likely increase the number of buyers looking to relocate from more expensive cities to areas with a lower cost of living. In our area, this means an increasing buyer pool from the Bay Area. Wiener states that agents across the country report that well-priced single-family homes are selling extremely fast, often above the list price.
With all these reports saying it is a great time to sell, what does this mean for buyers? According to May 15, 2020 OpenHouse newsletter by HousingWire, the average US mortgage rate is 3.38%, not far from the 3.23% all-time low set at the end of April. There are even lenders offering rates as low at 2.5%! This is good news for buyers. Also, the number of buyers actually visiting homes is down overall (i.e. no open houses currently), so competition is generally not as fierce.
Folks who had planned to sell and buy before Coronavirus have generated a lot of pent-up demand. What is typical in real estate in the spring will likely be pushed back towards summer months. Ralph McLaughlin, Chief Economist and Senior Vice President of Analytics at Haus, is quoted in OpenHouse as saying that once the pent-up demand has passed, “the real steady state of demand will show itself, which is going to be lower than it has been over the last six/seven years, and that will lead to another drop in the fall after most of the repercussions from this pandemic have gone away.” The possibility that COVID-19 will come back in the fall “is likely to lead to another noticeable drop in the housing market before a full recovery at this time next year.” Ah, he ends on a hopeful note!
Whether buying or selling, make sure you are working with an agent who is up to date on federal, state, and local guidelines for managing health and safety regarding COVID-19. Stay healthy. Stay safe!
Debbie Austin is a realtor associate with Keller Williams, Roseville and has been helping clients buy and sell property in the area for 16 years. If you have a specific real estate question you wish to see addressed, contact Debbie at debbieaustin@kw.com or debbieaustingroup.com.
