Despite the fears of many that the real estate industry would see swift and severe impacts from COVID-19, the last three months all posted strong numbers by any account, but especially in this time of upheaval. March saw sold dollar volume up 30%, units sold up 20%, and median sold price up 9%. April saw similar increases, with sold volume up 12%, units sold up 4%, and median price up 6%. May saw slight declines in total sold dollar volume and units sold, but an increase in median price to the highest level the market has seen. Low inventory was already something this area was grappling with and that issue intensified during this time, with active listings down 26% in April and a whopping 45% in May compared to the prior year. Even with low inventory plaguing the market, the fundamentals seem solid, but what does the future have in store?
A recent survey of FAAR members indicates that over 66% are more optimistic about their real estate business now compared to last quarter with just 16% saying there were less optimistic and 16% saying there was no change in their feelings.
What’s next is the question on everyone’s mind so FAAR brought in Virginia Realtors® Chief Economist, Dr. Lisa Sturtevant, to share what she’s seeing in the market.
- Inventory issues are causing some disruptions to the market as buyers cannot find what they are looking for or are seeing stiff competition with multiple contracts.
- Even so, pending home sales were up between April and May, indicating strong buyer demand.
- Current trends suggest no major impacts to home prices going forward.
- 2020 will overall be a slower market with stable prices, but no major impact from short sales or foreclosures.
- Right now, 8% of mortgage holders are in forbearance but 70% didn’t truly need it, indicating that there is not a coming foreclosure crisis.
- Apartments buildings are seeing approximately 90% of tenants paying. Even though unemployment is high, people are largely still able to pay their bills.
- The housing market will most likely see a crazy start to the year in 2021.
- Big question is will COVID-19 change preferences for home features like dedicated home office spaces or more outdoor space and amenities?
- Will location decisions be impacted with more buyers looking for suburban or rural properties?