Just like the coronavirus predictions about numbers of infections and deaths have been off the mark, so too are the predictions about the future real estate market. There are a whole range of conflicting opinions out there, all from reputable sources saying exactly the opposite things; what’s a girl to do?
So far, in spite of the shrinking economy and evaporating jobs, in the housing market values are stabilized and, in some regions, even higher. This of course has to do with the classic supply and demand dynamic that we’ve been experiencing for a long time, only now supply is contracting even faster.
The National Association of Realtors (NAR) reported that the March median home price nationally rose 8% from March of 2019. Manatee County’s March median sale price was also up by 2.4%. They also reported that buyer demand fell 8.5% nationally for March compared to last year but at the same time, supply is at a five-year low.
The NAR says homeowners are waiting to list their homes either because they have decided not to move, or they are worried about letting buyers into their homes during the pandemic. Many homeowners say that until the lockdowns are lifted, they will just take a “wait and see” attitude to selling. In addition, homes that are currently on the market are not cutting prices. According to Realtor.com, by the end of last month, only 4% of sellers cut their prices, indicating buyers haven’t viewed their homes in person. Nevertheless, buyers are out there still looking for a bargain and could possibly trip on a situation where homeowners absolutely need to sell because of coronavirus fallout.
Mortgage applications were also down by 20% at the end of April compared to a year earlier. The fear here is that down the road, values could drop when the forbearance period ends, and homeowners cannot keep up with the payments.
The way it stands now is some economists expect home sales to crash this year while some say prices and sales will climb slightly or hold flat. Fannie May said in April that it expects the median existing home price to tick up to $275,000 this year from $272,000 last year while CoreLogic calls for a nationwide home price increase of 0.5%. Zillow says home prices are likely to drop 2% to 3% compared to last year. The more you read about these predictions the more you realize no one really knows.
Let’s look at the April sales numbers in Manatee County reported by the Realtor Association of Sarasota and Manatee comparing April of this year to April of last year.
Single-family closings for this April compared to last year were down 21.2%. Median sale price was $340,000, up 7.9%, and average sale price was $406,699, up 4.1%. New pending sales were down 36.7% and months supply of available properties was 3.3 months, down 17.5%.
Condo closings were down 30.9%. Median sale price was $212,000, up 7.9%, and average sale price was $236,764, up 0.3%. New pending sales were down 53.3% and months supply of available properties was 4.4 months, down 6.4%.
All of the negative figures are no surprise relative to what we have been living through. However, the average and median sale prices are up, much like the trend around the country. Keep in mind that sales statistics are a lagging number frequently based on negotiated contracts that may have been in the pipeline prior to the shutdown.
All we can do is keep watching the numbers and hope that as businesses open more sales will be booked. At this point it’s anyone’s guess what’s going to happen with the virus or with the real estate market. Stay tuned and stay well.
