As people ponder selling and buying homes amidst the post-pandemic rebound and economic climate, there are things to consider. In my post several weeks ago Selling your home in time of uncertainty, I mentioned that real estate markets are not affected by short-term economic turmoil. The real estate process can take 4 to 6 months. Any impact will not show up for several months. When we look at housing market totals from March 2019 and March 2020, there was only a half percent difference in real estate transactions in Maryland. Remember it is still a sellers’ market with low inventory levels. For example, we had a house go ‘live’ this week, and we booked 44 appointments on the first day. What does this tell us? That buyers are still looking as there is incredible value in the market right now with historically low-interest rates.
House sales will inevitably decline this spring, but home prices will remain stable because of a pandemic-induced further reduction in home inventory. A recent survey by Realtor.com stated that 72% of realtors have not reduced prices to attack buyers. It is simply bad business to reduce home prices when we see a continued drop in housing inventories. In fact, the housing inventory (the number of active properties listed on the market) is the lowest since 1999. This low supply in the market tends to push housing prices up more rapidly. Coupled with the fact the mortgage rates are the lowest in almost 50 years you will still see high demand. See Freddie Mac 30-year fixed-rate chart. Remember the mortgage markets typically do not follow short-term financial markets changes but trends more towards longer-term markets like 10 year treasury rates.
Real estate professionals are finding ways to work virtually to complete transactions. We rolled out our clean home program and our virtual agent service several weeks ago to much success. For the people who are hedging, once this uncertainty with COVID-19 diminishes, we will see a flurry of real estate activity. Now is not a time to be timid in the marketplace with low inventories for sellers and low-interest rates for buyers.
If you are in the market for buying or selling a home, Vinny Steo is your best choice in Bel Air, Maryland to help you. Call us at 410-220-0016 or fill out the form below.
