“We are in a new world and business isn’t going to operate the same way, ever again.”
2020 Summer Housing Forecast by CEO Brenda Tushaus
Many buyers and sellers are looking for advice on what to do or what to expect with buying or selling homes this 2020 summer. I’ve been following news sources, talking with experts and compiling data to give you and idea of what we may encounter.
The only way to predict the future is to look at the past. Because we’ve never experienced anything like this before, we’re all moving through this the best we can—by preparing for the worst BUT expecting the best.
We currently have low inventory and record low interest rates, which means demand is high. Whenever demand is high, pricing stays strong.
We don’t know what the lasting effect will be on our economy, and we do not know how fast we’ll rebound, but we DO know the world is forever changed.
Post-pandemic, real estate agents will continue to conduct virtual showings and virtual open houses. Pre-signings for sellers and separate closings are now customary for closings. We are in a new world and business isn’t going to operate the same way, ever again.
After 9/11, we saw economic recovery that looked a lot like a spike. Straight up and quick. Economists predict this recovery will look more like a “u”— down, for some time at the bottom, and eventually a move back up.
We know that China’s housing market is already springing back to life as more sales offices reopened across the country following their nationwide shutdown. According to the China Real Estate Information Corporation transactions in at least eight large cities indicated buyers have returned in recent weeks, with sales volume surpassing the average levels that were seen in the final quarter of 2019.
Still, other experts in China predict a 30 to 40 percent dip in home sales for the first half of 2020.
Housing outlook for the entire year in China and the US depends on the coronavirus. The only way to control the market is to control the virus, and we can’t do that.
Right now, there are too many unknowns and people’s behaviors are reflecting that.
Results from a recent National Association of REALTORS® Flash Survey show that approximately 60% of home buyers and sellers are delaying for a couple of months.
In a recent poll of RE/MAX Results Sales Executives in Minnesota and Wisconsin, 60% of the respondents reported they have buyers and sellers who are actively on the market but have reported some degree of others wanting to delay the process. Overwhelmingly, comments from RE/MAX Results Sales Executives with active buyers have reported they are still encountering multiple offer situations.
The Chief Economist for the National Association of REALTORS, Lawrence Yun, recently stated that “much of the activity looks to reappear later in the year.” As well, Yun says, “Home prices will remain stable because of a pandemic-induced reduction in inventory coupled with less immediate concerns over foreclosures.”
We have started to see growing confidence in our national plan to keep the virus at bay and RE/MAX Results’ weekly stats reflect a similar confidence.
Our showing activity has been climbing back up. As of April 20th, our number of showings are up 28% from the first week of the shelter in place, although they’re still down about 40% compared to the same period last year.
Our new listings are down about 30% over last year at this time, but the drop in numbers has slowed and our week-over-week numbers have remained flat. This is hopeful. All this means is that sellers who can wait are waiting.
Because the health and well-being of our most vulnerable citizens is on the line, everyone is being appropriately cautious. RE/MAX Results Sales Executives are supporting their clients who are on hold and they are focusing on their needs and not wants.
As the world begins to open back up, we should see behaviors with buyers and sellers that line up with recovery. So, here’s what you can expect, when the virus slows down, the housing market will pick back up.
Please keep yourselves safe by following all recommendations from the CDC and the Minnesota Department of Health.
Thank you,
Brenda Tushaus – CEO, RE/MAX Results