As it currently stands, about ½ of homeowners believe now is the time to put their home on the market, down 29% from February 2020 according to the Home Purchase Sentiment Index (“HPSI”). The Fannie Mae’s HPSI is designed to measure the attitude of home buyers and home sellers in the US housing market. Similarly, only 56% of Americans believe it is a good time to purchase, representing a 7% decrease from February 2020 to March 2020.
The HPSI identified some of the reasons for sellers’ decreased expectations regarding the housing market; specifically, sellers are concerned that public health and social distancing requirements have made it difficult to attract potential buyers. Sellers identified the fact that these restrictions make it impossible to hold open houses or showings, which reduces the likelihood that a large number of buyers will be interested in their homes (ostensibly driving prices down).
Additionally, people expect the cost of homes, as well as mortgage rates, to decrease as COVID-19 runs its course. In February 2020, about 8% of those surveyed expressed a belief that home prices would fall. This is significantly less than the 22% of people who expressed that belief in March 2020. While it is normal to think housing prices will decrease in the midst of an economic disaster, it is unreasonable to believe that prices will hit bargain basement levels as a result of COVID-19; the housing market is a resilient ecosystem and will find ways to adjust to our new, albeit temporary, reality.
At the Chernov Team we understand that knowledge is power, and knowledge that the market will take a short-term dip but remain robust long-term 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.
