Despite what you may think, the coronavirus hasn’t caused home prices to drop.
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We’re now into May 2020 and still living under the COVID-19 lockdown and dealing with the economic impact.
Not only are sellers concerned about how this affects home prices, but they’re also concerned about how this affects their buying value if and when they want to buy a new home.
Recently, the National Association of Realtors released a report revealing that 74% of Realtors across the U.S. said that sellers were not dropping their prices. In my opinion, this statistic reflects the demand we’re seeing in the market. Home values are driven by demand, and if there are a lot of homes on the market and a buyer can choose from dozens of homes in a particular area, they’re in the driver’s seat. They can make those sellers compete for their business.
When this lockdown began, though, our market had low inventory. As states implemented social distancing safety measures and these measures impacted how homes were sold, some sellers pulled their homes off the market, and some buyers decided to wait things out. This reduced inventory even further. At the same time, many second-home, out-of-state buyers who are usually active in our market at this time had to put their plans on hold, which reduced demand.
Home prices are holding steady.
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In other words, just before the coronavirus hit, our high demand and low inventory put us in a seller’s market, and since both demand and inventory have dropped, we’re still in a seller’s market. Some people are comparing this situation to what we saw in 2008, but that was an economic disaster, and we’re in a very different market now than we were back then. This is a health crisis, and it has put things on pause rather than caused everything to disintegrate.
Therefore, home prices are holding steady. If you’re a buyer, this means you won't likely see any price discounts happening. I’ve sold two homes within the last two weeks that went under contract at or near asking price in under five days. That’s not the kind of market that’ll lead to low pricing.
If you have questions about our market or your specific situation, don’t hesitate to call or email me. I’m here to help, and I hope you stay safe out there.