Few homes look their best in the dirty grays of late winter, which is, in part, why homebuying season coincides with the arrival of spring. This year, however, the colorful flowers that can make a house look that much nicer are showing up alongside the less reassuring news of a virus circling the globe.
If you’re already in the market for a house, all the uncertainty might have you worried about the housing market. Will COVID-19 cause housing to collapse, as it did during the financial crisis in 2008?
Historically low inventory and rock-bottom mortgage rates would normally set the stage for a highly competitive homebuying season. While recessions normally have only a minor effect on the housing market, the coronavirus is making life and markets anything but normal.
Zillow conducted a study on housing during previous pandemics and concluded that while home sales dropped dramatically during an outbreak, home prices stayed about the same or suffered a slight decrease. This makes intuitive sense because it’s harder for prices to change when there are few transactions. In short, previous pandemics have simply put the housing market on pause.
Buying a house, however, isn’t the same as turning the Frappuccino machines back on, or pulling the trigger on a bigger flat-screen TV in case we’re locked down again. Housing is an emotional, big-ticket game, inextricably linked to macro-level downwind pressures on employment, wages, job mobility, the stock market, and ultimately, consumer confidence—whose quick resuscitations are still far from certain.
Home price growth will flatten, with a forecasted increase of 1.1%.
Inventory will remain low, but the rate of decline steadies and the mix of homes for sale shifts toward greater availability of lower-priced homes.
Mortgage rates remain low and may slide under 3% by the end of the year.
Home sales are constrained by low inventory and diminished seller and buyer confidence as the effects of COVID linger in the labor market.
Buyers seeking affordability and space drive interest in the suburbs.
I am here to HELP YOU! Helping people has always been my main focus and he has been through helping others rebuild, saving them from danger, delivering news during frightening times, and helping provide food in the Ag industry. Other people's success, dreams, and memories are more important than commission, and helping others achieve the dream of homeownership is the most rewarding part of my job. These may be uncertain times, but there is no doubt I can get you into the home of your dreams.