In today’s climate, there’s a lot of misinformation and uncertainty in the marketplace. I recently had the pleasure of interviewing Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research at the National Association of REALTORS®, to get an update on the ongoing effects of the Coronavirus on the economy and housing. Here are some of the main takeaways, based on the very latest data:
The Market Is Still Active
The first couple of weeks after the pandemic hit, the market was affected by a degree of shock factor, with March sales down 8 percent on the previous month. However, the latest NAR survey has revealed that potential buyers and sellers are not out of the market – they are just delaying their entry point until the all-clear is issued. There is no panic, with both buyers and sellers acting normally. This is simply a delay – people still have a great desire to buy, sell and own a home.
Lack of Inventory Is Still an Issue
There was a housing shortage before the pandemic hit and there is still an acute shortage today. Because of this inventory shortage, it is unlikely that house prices will decline going forward and data shows that there is little expectation by buyers for any big discount. For the year as a whole in 2020, it is anticipated that sales activity will be down about 10 to 15 percent, which is very acceptable for a bump in a year. Going into 2021, with pent-up demand, it is expected that sales will increase about 15 percent, with prices rising 3 to 5 percent.
This Is a Pause
Based on past catastrophic events, there is nothing to suggest that just because we have been hit with a pause button that things will automatically come apart. This is an adversity that we will get through. We will come out the other side with more knowledge and better relationships, which is a very good starting point for the upturn that is anticipated to happen later in the year. The house is still a valuable asset in high demand. Buyers want to buy and sellers want to sell – this is simply a pause.
Listen to the latest episode of “The Brian Buffini Show” to get more clarity and perspective on today’s real estate landscape.