As you are likely aware, the arrival of COVID-19 effectively brought the housing market to a standstill, but the data is suggesting that the housing market will make a serious comeback during the Summer of 2020. Specifically, the housing market appears to have bottomed out in the middle of April 2020, but there is a lot of data indicating a strong summer market.
Comparing inventory between 2019 and 2020, April 2020 saw a 44.1% decrease, May saw a 29.4% decrease, and the last week of May saw a 20% decrease; the trend cannot be ignored. If this trajectory is consistent, we should be out of the slump very soon. This perspective is bolstered by the fact that 70% of the nation’s top 50 cities showed growth in housing prices in May; Los Angeles was one of the big winners.
While these are good signs, it is worth noting that homes are still selling slower than pre-COVID-19. Homes sold in roughly 71 days in May 2020, whereas the sold in 62 days in April 2019 and 58 days in May 2019.
The bottom line is that we will see a resurgence in the housing market this summer, but we should be cautious. If the experts are right, and we will see a strong second wave of COVID-19, Fall 2020 could be a tumultuous period of time for the housing market. Take solace in the fact that these slowdowns are artificial in nature, rather than exposing a serious flaw in the market, so that slow down won’t last as long as the Great Recession of 2008.
At the Chernov Team we understand that knowledge is power, and knowledge of how the market is behaving is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.
