If you have felt like 2020 has had so many twists and turns that you don’t know which way is up, then you’re not alone. However, at the Chernov Team we pride ourselves on always being up to date with real estate trends, even if everything else seems just barely out of reach. Naturally, a lot of people are curious about how the housing market will behave for the rest of the year, and we are here to provide a little insight on that subject.
The fact of the matter is the last couple of months have often been challenging, but that could change very quickly in the next few weeks as restrictions are lifted in Los Angeles County. After a rocky start to the year, it is likely that millennials will drive the 2020 housing market in late-summer, or early fall of this year.
Existing home sales are expected to come in approximately 15% lower than 2019, where 5.34M homes were sold, meaning 4.5M homes are expected to sell this year (compared to the original prediction of 5.25M). The drop in home sales is understandable (we have been locked down about 1/6th of a year so far, so 15% is pretty close), but not entirely bad news for sellers who are concerned they’ll be forced to substantially decrease their asking price; homes should appreciate by 1.1% through 2020 (though pre-COVID-19 predictions had this number ranging between 2% and 4%).
The real issue with the housing market will likely be obtaining loans, as banks will be a little more hesitant to make large loans in the face of an unsteady economy. To that end, these historically low rates (possibly sub-2%) may only be available to individuals with stellar credit, and a strong financial safety net. On the flip side, as a Seller, that means that the offers received will be from even stronger and well qualified Buyers.
Nothing is guaranteed, but there is a strong chance that post COVID-19 Buyers will have different priorities than their pre-pandemic predecessors, and those who anticipate those changes will be poised to move forward in a big way when the time comes; which looks like late-summer or early fall.
At the Chernov Team we understand that knowledge is power, and knowledge of when the market will pick back up and what that market will look like 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.
