Will this graph still look like this at the end of June?
Here is what the Charlottesville Area Association of Realtors used to begin their market report for the 1st quarter of 2020. https://bit.ly/CAARMKTReport
- “The Charlottesville area economy has been very strong leading into this challenging time. The region’s strong economy and strong housing demand will be important to the future health of the Charlottesville area’s housing market.
- Like the rest of Virginia and the nation, the Charlottesville region will be experiencing the economic impacts of COVID-19 this spring.
- Permits for new residential construction had been strong over the past six months, including in February 2020, the most recent month for which data is available.
- Consumers’ confidence in the economy has been declining somewhat for several months. Expectations about future economic conditions have become pessimistic in the early spring.
- Mortgage rates are still low, but there has been substantial volatility and growing uncertainty in the mortgage market.”
Usually, I dive into the numbers to share trends and given what has happened recently, project what to expect in the coming months. You can click on the link above to get more detail but The Coronavirus has changed all of what we usually talk about including real estate. As we enter the month of May, we are already a month into the second quarter. The early 2nd quarter numbers along with what is written above indicate that the graph at the top will probably show a downward trend to that arrow when the next report comes out at the end of in July. Sellers have taken their homes off the market or have been slow to activating them creating low inventory. Homes going under contract have decreased, not just with existing homes (28% decrease) but with new construction which have been so robust (down 31% in April) as well.
Is this reason to panic? Many folks are saying we will see the spring market move to fall. I am a little bit more optimistic. Even though April and May will feel the impact of Covid19, I think we will see a return to what we saw in the 1st quarter sometime in mid to late June meaning the graph arrow will be trending upward again when we see the 3rd report of the year in October.
Both buyers and sellers can take advantage of the market right now while staying within the guidelines set forth by the Governor. If you are a seller there is less competition out there as many folks have chosen not to have their house on the market right now. If you need to sell now, keep your house sanitized so your listing agent can assure folks who want to see the property will be safe doing so. Ask your listing agent to request masks to be worn and shoes to be left outside. Leave your home with lights on and doors and cabinets open so those in your home won’t need to touch anything. Buyers, there are not as many people out looking at homes right now. You now can take advantage of an increased emphasis on looking at homes virtually. If you and your agent are comfortable looking at a home that picques your interest, you have a much better chance right now given the decreased amount of buyers out there. It might allow you to get a little bit better price on the home while taking advantage of the very low interest rates.
If you are not ready to move forward, be OK with that decision. There will be buyers out there and the interest rates will still be attractive. If you are a buyer, I think you will see lots of homes coming on the market later this month or in early June. Remember that this was a health crisis not an economic one when this all started. All the economic experts are saying that when Covid19 is under control the housing market will rebound. Here are a couple of links where you can hear from those economists. Dave Stevens https://bit.ly/housingmktrebound and Virginia Realtors Chief Economist Lisa Sturtevent https://bit.ly/whythingswillgetbetter
The question will it be as early as late June or move more to late summer or early fall?