Home Values After Covid-19

Dated: 05/12/2020

Views: 165

With the housing market staggered to some degree by the health crisis the country is currently facing, some potential purchasers are questioning whether home values will be impacted. The price of any item is determined by supply as well as the market’s demand for that item.

Each month the National Association of Realtors (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for the REALTORS Confidence Index.

Their latest edition sheds some light on the relationship between seller traffic (supply) and buyer traffic (demand) during this pandemic.

Buyer Demand

The map below was created after asking the question: “How would you rate buyer traffic in your area?”Will Home Values Appreciate or Depreciate in 2020? | Simplifying The MarketThe darker the blue, the stronger the demand for homes is in that area. The survey shows that in 34 of the 50 U.S. states, buyer demand is now ‘strong’ and 16 of the 50 states have a ‘stable’ demand.

Seller Supply

The index also asks: “How would you rate seller traffic in your area?”Will Home Values Appreciate or Depreciate in 2020? | Simplifying The MarketAs the map above indicates, 46 states and Washington, D.C. reported ‘weak’ seller traffic, 3 states reported ‘stable’ seller traffic, and 1 state reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is needed to satisfy the needs of buyers looking for homes right now.

With demand still stronger than supply, home values should not depreciate.

What are the experts saying?

Here are the thoughts of three industry experts on the subject:

Ivy Zelman:

“We note that inventory as a percent of households sits at the lowest level ever, something we believe will limit the overall degree of home price pressure through the year.”

Mark Fleming, Chief Economist, First American:

“Housing supply remains at historically low levels, so house price growth is likely to slow, but it’s not likely to go negative.”

Freddie Mac:

“Two forces prevent a collapse in house prices. First, as we indicated in our earlier research report, U.S. housing markets face a large supply deficit. Second, population growth and pent up household formations provide a tailwind to housing demand.”

Bottom Line

Looking at these maps and listening to the experts, it seems that prices will remain stable throughout 2020. If you’re thinking about listing your home, let’s connect to discuss how you can capitalize on the somewhat surprising demand in the market now.

Latest Blog Posts

7 DIY Wall Projects for the Home You Should Know How To Do

Lately, weekly meal prep, work meetings, and kids' activities have all been taking place inside the same four walls. So you might have caught yourself staring at one of those walls and wondering how

Read More

"I Have an FHA, Can I Buy a Second Property with a Conventional Loan?" (Tara Mortgage Services Featured Blog)

Real estate continues to be one of the best ways to grow wealth and create financial stability. And that's true for both single property owners and multi-property owners.In fact, that's one reason

Read More

How to Keep Your Home Cool This Summer

When summer temperatures soar to the triple digits, you can beat the heat by heading to the community pool or hitting up your favorite air-conditioned coffee shops and movie theaters. You will

Read More

Best Vitamins to Boost Your Immune System (Featured Blog from Ivee!)

Binge-watching the news lately? If so, you probably have heard the coronavirus attacks the immune system. The people who are most at risk are immunocompromised. The immune system is an essential

Read More