My Housing Market Predictions considering Coronavirus
As we all know, the coronavirus (also known as Covid-19) has dealt a shock to the global health and economy with unprecedented speed.
Companies are in survival mode causing tens of thousands of people to lose their paychecks. Conversely, governments are passing trillions of dollars into programs to stimulate the economy, or at least in effort to evade a crash of the economy.
So what will happen to the Housing market here in Las Vegas? That is the big question homeowners and potential homeowners & Sellers want to know.
So let’s start with the present. The march numbers were released from the Las Vegas Realtors (previously known as the Greater Las Vegas Association of Realtors) for which I am a part of.
The effects of the coronavirus hit us about halfway through the month. The median price for March was $319,000. So despite everything, we are still up over 6% to a median price of a record $319,000!
So you can only imagine how hot our market was before the virus hit. There were a lot of sales in the pipeline that ended up being cancelled amidst fears. In fact, it was double the amount of cancellations from the same time last year. (There were 2500 cancellations in March 2020 vs. only 1300 at the same time last year.)
We still have a short supply, but people are still listing their homes for sale on the market. So this will give Buyers a little more choice with a little less competition during this lock-down period. Adding to that, the interest rates for purchase mortgages are still very low so most Buyers are qualifying with rates well below 4%
So now given that by the beginning of April, our city was in lock-down until the end of the month, with stricter rules seemingly being doled out by our governor day by day and hour by hour, will the sales trajectory continue for the month of April? Probably not.
However, while things have changed, what we do as Realtors is still an essential part of society, but now we have and need to change how we do it. As you may have heard, what we do hasn’t changed, but how we do it has.
So what will the future of the Housing market and prices hold? Given the unprecedented events, any opinion on the matter is an educated guess at best.
But given the market prior to the Coronavirus hitting us, what I’m seeing as the Chinese housing market rebounds from their shut down in the short time since being free to leave their homes and try to resume life as it was before the quarantine, I do not expect home prices in the U.S. to drop drastically. It is likely to just slow down the speed at which the prices are increasing.
I believe once we pass the apex and our stay-at-home orders are lifted, there come a release of pent-up demand from Buyers and the lock-down period. This will warm up our market that has currently been cooled as a result of the recent events.
The big question is how the unemployment issue will bounce back in our city. Hospitality and small businesses make up a significant portion of our local economy and employment pool. If tourism to our city does not bounce back, this affects the ability for potential buyers to qualify to purchase using a mortgage.
Another question is how much support the government will offer to keep the liquidity for lenders. If they don’t have the availability of funds to lend, they won’t be able to lend.
If the coronavirus conditions are improved and the lock-down is lifted prior to May as hoped I think the worst case scenario is the slow-down of sales. Meaning, the prices won’t decrease all that much, but rather the time it takes to get in contract and close escrow will be longer.
The sales outlook for the whole year depends on development of the coronavirus condition.
So my recommendations are:
If you currently rent, better to buy now either way
If you are looking to buy and are in a position considered essential, better to buy now
If you are looking to buy, but are uncertain on the longevity of your income stability and don’t have an immediate need to buy, better to wait until we’re past this current circumstance. But know the risk of an increased mortgage interest rate, or change to stricter lending criteria is out there.
If you are looking to sell and the home is vacant, better to list for sale now.
If you are looking to sell, but don’t have an immediate need, better to wait for this coronavirus pandemic to end and a little more certainty exists.
If you are looking to buy or sell, contact me at LasVegasHomesByJennifer.com
I can send a free list of homes on the market if you are looking to buy so you can see what’s out there. And I can send a free Home Report so you can have idea of what similar homes are selling for and how long it’s taking in your area.
Jennifer Harper, REALTOR®
Executive Realty Services
Call or Text: (702) 542-3089
Real Results for your Real Estate Needs!!