Soon after the Great Recession, house prices plummeted and buyers who had money swooped in to buy houses that had fallen in value by as much as 50 percent.
Now, coronavirus and a recession that began in February are punishing the economy. Does this mean people should expect another wave of affordable housing prices? Apparently not.
Kasia McDermott, a realtor in North Long Beach, says the median area sales price fell 7% in May 2020, but prices slowly rose in the month following. When COVID-19 first hit, many sellers pulled their listings from the market because no one was buying them, McDermott said. “Nobody is listing. They don't want people in their houses… They don’t think they’re going to get the price they’re going to get.” McDermott recently had two listings and sold them both within two days. “People want stability... Essentially when you buy a house, you’re guaranteeing yourself rent control for 30 years.” McDermott says By TanNorth Long Beach is known for being home to first-time home buyers.
MarketWatch.com indicates that even though existing home sales dropped nationally in May, it predicts the market will redeem itself this summer. According to Market Watch, “On a regional basis, sales fell most notably in the Northeast, where they were down 13%. Every region saw a decrease in sales last month.”
Although the entirety of the country saw a decrease in sales last month, demand remains present. According to data released by the Mortgage Bankers Association,“The number of people applying for mortgages used to purchase homes increased for the ninth consecutive week, hitting the highest level in over 11 years.”
A recent national housing forecast from Realtor.com predicts:
- House price growth will flatten, with a forecasted annual increase of 0.8 percent
– Inventory will remain constrained, especially at the entry-level price segment
– Mortgage rates are likely to bump up to 3.88 percent by the end of the year
– Tight inventory and rising mortgage rates will lead to dropping sales
– Buyers will continue to move to affordability, benefiting mid-sized markets