With the global ramifications of the coronavirus outbreak, including stock market dips, trade fears, cancellation of numerous public events, corporate travel restrictions, and an emphasis on social distancing, some homeowners may be rethinking putting their homes on the market this spring. But before making the decision NOT to sell this spring, consider the following positives:
“A strong job market and low mortgage rates should sustain the housing market in 2020. The problem will be finding enough homes for buyers.”
- Kathy Orton for the Washington Post
From the National Association of Realtors:
The trade association for real estate agents predicts moderate growth in the housing market and continued low mortgage rates.
New-home sales are expected to rise to 750,000, an 11 percent increase that puts them at a 13-year high. Existing-home sales will continue to be held down by lack of supply, rising modestly to 5.6 million, a 4 percent increase. The national median sale price of an existing home is expected to grow to $270,400, an increase of 4.3 percent from 2019.
The real estate listings website expects inventory to evaporate, making it more challenging for buyers to find a home despite attractive interest rates.
“Real estate fundamentals remain entangled in a lattice of continuing demand, tight supply and disciplined financial underwriting,” said George Ratiu, senior economist at Realtor.com. “Accordingly, 2020 will prove to be the most challenging year for buyers, not because of what they can afford but rather what they can find.”
What does this mean for sellers?
Existing homes are in short supply. Fewer homes means less competition.
With low interest rates, buyers have greater flexibility in home prices
Spring 2020 may actually be the best time to enter the market
According to Redfin predictions: “Bidding wars will rebound thanks to low mortgage rates and a lack of homes for sale.”
Low mortgage rates will continue to strengthen home buying demand, but due to a lack of new homes for sale and homeowners staying put longer, there will be fewer homes on the market in 2020 than in the past five years. More demand and less supply mean bidding wars will rebound in the first quarter. We expect about one in four offers to face bidding wars in 2020 compared to only one in 10 in 2019. This increase in competition will push year-over-year price growth up to 6% in the first half of the year, considerably stronger than the 2% growth seen in the first half of 2019. Supply and demand will become more balanced later in the year as more listings of new and existing homes hit the market, allowing price growth to moderate to 3%.
The Bottom Line
If you were planning on selling your home this spring, the Whit Harvey Group says, “Give it a try, what have you got to lose?" The current lack of inventory and low interest rates mean you have a good chance of selling your home at a good price.
Sources: The Washington Post, Zillow, Redfin