Traditionally, spring is one of the busiest times of the year for real estate. However, the coronavirus outbreak led many buyers and sellers to put their plans on hold. New listings and sales volume fell compared to last year. Fortunately the market has seen an uptick in activity. Economists at Realtor.com expect a rebound in July, August, and September, as fears about the pandemic subside, and buyers return to the market with pent-up demand from the lost spring season. Given safety concerns and the economic climate, it is prudent to jump back into the real estate market? Before you decide, consider where the housing market is headed, how it could impact your timeline and ability to buy a home, and your own individual needs and circumstances.
What's Ahead For The Housing Market?
The economic aftermath of the coronavirus outbreak has been severe. We've seen record unemployment numbers and economists believe the country is headed towards a recession. But people still need a place to live. So what effect will these factors have on the housing market?
Home Values Are Projected To Remain Stable
Many Americans recall our last recession and assume we will see another drop in home values. But the 2008 real estate market crash was the cause-not the result-of that downturn. In fact, ATTOM DATA SOLUTIONS analyzed real estate prices during the last five recessions and found that home prices actually went up in most cases. Only twice (in 1990 and 2008) did prices fall, and in 1990 it was by less than one percent.
Many Economists expect home values to remain relatively steady this time around. And so far, that's been the case. As of mid-May, the median listing price in the U.S. was up 1.4% from the same period last year.
Demand For Homes Will Exceed Available Supply
There's been a shortage of affordable homes on the market for years, and the pandemic has further hindered supply. In addition to sellers pulling back, new home starts fell 22% in March. In fact, Fannie Mae doesn't foresee a return to pre-pandemic construction levels before the e4nd of 2021. This supply shortage is expected to prop up home prices, despite recessionary pressures. Fannie Mae and the National Association of Realtors predict housing prices will rise slightly this year, while Zillow expects them to fall between 2-3%. Still, that would be a far cry from the double-digit declines that occurred during the last recession.
Government Intervention Will Help Stabilize The Market
Policymakers have been quick to pass legislation aimed at preventing a surge in foreclosures like we saw in 2008. The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress gives government-backed mortgage holders who were impacted by the pandemic up to a year of reduced or delayed payments.
The Federal Reserve has also taken measures to help stabilize the housing market, lower borrowing costs, and inject liquidity into the mortgage industry. These steps ;have lead to record-low mortgage rates that should help drive buyer demand and make homeownership more affordable for millions of Americans.
Is It The Right Time To Move?
The reality is that is the it depends because everyone's circumstances are unique. Ask the following questions:
Why do you want to move?
How urgently do you need to complete your move?
How long do you plan to say in your new home?
Can you secure a mortgage?
Is your income stable?
When You're Ready To Move - I Am Here To Help
Market conditions present opportunity for those who are willing, able, and motivated to make a move. Reach out to schedule a consultation to discuss your individual needs and circumstances. I can help you assess your options and create a plan that makes you feel both comfortable and confident during these unprecedented times. Flavio Berny Mobile (909) 234-2971. Flavio@homesforsaleinchino.com