After four weeks of #stayathome the real estate world is settling into a new virtual realty. Open houses are a thing of the past, as is buyers and sellers and agents gathering around the closing table.
Yesterday HousingWire reported that according to Zillow, even though new listings and home sales have dropped since COVID-19 hit, more buyers are actively looking for homes online than a year ago. They also shared additional info about Minneapolis Zillow usage…
“Of significant note, Minneapolis had strong year-over-year growth in traffic before March 11, then made a massive drop starting March 16, around the time Minnesota Gov. Tim Walz closed public gathering areas and restaurants. Once mid-April rolled around, Zillow traffic spiked by double-digits.“
This follows the trend we are seeing in home showing requests.
It appears people are getting used to the new virtual reality of vetting homes online first, then using protocols of wearing facemasks, hand sanitizer, gloves for showings before making an offer. Activity isn’t back to what it was, but I am seeing more activity again… people are tired of being cooped up and are eager to get out again! I wrote an offer last weekend with multiple bids… feels like old times.
Not only did showings increase, both Coming Soon and New Listings also popped up. Note how pending sales tend to follow new listing trends… a sign buyers are watching what is coming on the market and making a move when they find the right house for them.
So where are we going from here? It is extremely difficult to project the future of the economy. Past pandemics have had a V-shaped recovery, which was the initial thought before we knew as much as we now know about coronavirus. A new Reuters poll of 45 economists taken April 15-20 showed more favored a U-shaped recovery, taking into account…
1. Business Science – How has the economy rebounded from similar slowdowns in the past?
2. Health Science – When will COVID-19 be under control? Will there be another flareup of the virus this fall?
3. Social Science – After businesses are fully operational, how long will it take American consumers to return to normal consumption patterns? (Ex: going to the movies, attending a sporting event, or flying).
The challenge of accurately combining the three sciences into a single projection has created uncertainty, and it has led to a wide range of opinions on the timing of the recovery.
In the mortgage arena… economists in Fannie Mae’s Housing Forecast report predict that the average 30-year-fixed mortgage for 2020 will drop to 3%, and then fall to 2.9% by 2021, both all-time lows. A year ago, mortgage rates averaged 4%.
Lower borrowing costs could increase housing affordability, and even with a slowdown Fannie Mae economists are still predicting existing home prices to increase by 2.5% between 2019 and 2021.
Lawrence Yun, Chief Economist for the National Association of Realtors, says…
“More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
Until next week…
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
