Before the pandemic hit, the housing market was showing signs of strength. In fact, new home sales in January and February were at their highest pace since the Great Recession. However, when the stay-at-home orders went into effect, sales of both newly built and existing homes dropped in March as potential buyers hunkered down, and potential sellers pulled their homes from the market as they watched the economy take a hit from the coronavirus.
Now, twelve weeks later, as Ohio and other states are reopened, and unemployment claims start to slow down, buyer demand is climbing back up even higher than it was pre-COVID. While no one can fully know when we’ll see the end of the pandemic, we can look for the following signs that the housing market is on the rebound.
End of Stay-at-Home Orders
The first prerequisite for the economy getting back on track was the lifting of stay-at-home orders. In Ohio, this started on May 1 with dentists, vets, and general business. Retailers opened back up on May 12, and restaurants, bars, gyms, and salons on the 15th.
In February 2020, prior to COVID-19 stay-at-home orders, existing-home sales were the strongest they’ve been since 2007, according to the National Association of Realtors. This growth could be due to the low mortgage rates and growing housing demand.
In addition, people are spending more time at home, which is prompting people to seek out better neighborhoods and larger homes with more amenities.
Once businesses more fully start back up and jobs are regained, we can predict that the housing market will follow along with an increase in demand.
Decline in Unemployment Claims
When jobless claims start to fall, you can believe we are on the road to recovery. Before COVID-19, jobless claims were at all-time lows. They spiked considerably over the eight-week stay-at-home height but now slowing down significantly as the economy opened up more fully.
Housing is a basic need, and the decision to buy one is usually prompted by entering a new stage of life. And no matter what is happening, these life changes will continue to happen, and demand will continue to be there. And the demand is getting higher with each passing day.
Pending home sales mounted a record comeback in May, seeing encouraging contract activity after two previous months of declines brought on by the coronavirus pandemic, according to the National Association of Realtors®. Every major region recorded an increase in month-over-month pending home sales transactions.
“I’ve talked to a number of people that think that sellers are going to panic and drop their price because of the coronavirus, but that just hasn’t happened,” Jon Bowling, owner of J+L Home Group states. “It has been closer to business as usual than anyone would have expected two months ago.”
The housing market is not simple to predict. That’s why it pays to have an expert in your corner as you navigate your next move when it comes to buying or selling a home. To work with an agent who has weathered the storms of real estate over the last 20 years, give us a call