March existing-home sales were down compared to 2019. These metrics were influenced primarily by COVID-19 pandemic responses such as social distancing and executive orders to stay-at-home. With that said, the decrease of this statistic was not entirely a collapse in the market.
Heading into the pandemic the first part of 2020 presented a strong and healthy housing market. In the Richmond-Metro area, home sales (1,795 homes closed) and prices ($265,000) were up compared to 2019 (1,717 and $254,000) and the days on the market had decreased. The housing market was busy, with the largest concern resting on the inventory of homes for sale, which was not a new problem to 2020
The question that has to be answered is where does the economy and the housing market go as COVID-19 continues to create a “new norm.” A positive statistic to look at is how the market continued to respond, even after the stay-home order was issued. Below are the number of pending-sales, and it is seen that pending sales in March were actually slightly higher (2,195) compared to March 2019 (2,121). Clearly, people are willing and need to home shop during this time. As we have seen in other articles, it is just be performed differently.
The expectation is the market will continue to wane over the next few months as response and recovery efforts continue. Buyers looking to use FHA loans and other low-down payment products will face greater hurdles, reducing first-time home buyer activity. Sellers will likely stall their aims at putting their homes on the market as they will wait to determine how the economy responds.
One particular segment of consumers that will likely rise are investors. With the expected rise in foreclosures and short sales, real estate investors looking to purchase rental properties or homes for flipping will increase. Opportunities will rise for all buyers who are willing to look for the right deal. The critical factor in the process is to ensure you are working with a strong team to ensure your decision-making is sound and supported by data from professionals.