This Summer’s Housing Market is Going to be Hot, Hot, Hot!

We are officially in a recession, but you wouldn’t know it looking at the housing market and housing prices. Neither a pandemic, nor the current social climate of protests, have slowed the unstoppable force that appears to be the housing market. 
In the week of June 6, 2020, housing prices are up 4.3% from the week of June 6, 2019. Prices are going up despite the fact that the United States entered into a recession in February 2020. While this falls short of the standard 5% to 6% annual increase we have come to expect, it is still very impressive to see such a robust housing market in light of everything; in May 2020, the national median listing price was $330,000. At the risk of being repetitive, it is nothing short of incredible to see the housing market behave in such a resilient manner; yes, it is performing at a lower level than previous years but that is to be expected. 
Part of the explanation for such a sturdy market is that inventory has decreased significantly; the number of houses on the market in the first week of June 2020 is 25% lower than the number of homes on the market in the first week of 2019.  (March 2020 has 16% less homes on the market than March 2019). Simultaneously, home buyers with financial stability have been rushing to the housing market in light of sub-3% mortgage rates (2.94% for 30-year FRM as of last week). Moreover, because many would-be home buyers put off searching for a home during the peak of the COVID crisis, the housing market is seeing two distinct groups (early year buyers and summer buyers) competing for less inventory; this is the perfect storm for bidding wars, which increase the price of a property in most instances. By way of anecdotal evidence, the Chernov Team has listed multiple properties at market value prices and have received multiple requests to view the property within hours, and have received multiple offers well-above asking within a few days. 
Further evidence that the housing market is thriving in an economy that is not can be found in mortgage applications. During the week of June 6, 2020, applications for purchase mortgages was 12.7% higher than the week of June 6, 2019. The number of home purchase mortgage applications in the week of June 6, 2020 was also 15% higher than the number of applications at the end of May 2020. 
We wouldn’t be doing our jobs if we didn’t note that while things are looking good for the housing market, we’re not entirely out of the woods. Unemployment is still the highest it has been since the Great Depression nearly a century ago (14.4% in May), and roughly 1.5M Americans filed for unemployment in the week of June 6, 2020. As a result, a large number of people simply can’t afford to buy homes. The silver lining is that as unemployment decreases, the housing market will see even larger gains as a result of the factors discussed above. If you are a home seller in Summer 2020, you’re going to have a very good time. If you are on the fence about selling your home, conditions like these won’t be around for long; this is the time to sell. 
At the Chernov Team we understand that knowledge is power, and knowledge of the factors that are combining to create a hot, hot summer for the housing market 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.