The pandemic impacted the spring housing market, but real estate professionals are finding that buyers are starting to come back. While a significant drop in mortgage interest rates didn’t do much to help home sales in April, local professionals say that May was significantly busier with REALTORS® once again able to leave their homes to conduct business.
The national landscape
According to the National Association of REALTORS® (NAR), existing home sales fell to an annual rate of 4.3 million in April, down 17.8 percent from the prior month and 17.2 percent from one year ago.
NAR reported that prices remain generally firm although the pace of acceleration has slowed a bit, benefiting buyers. The Association also found that inventory is still tight across the country. At the end of April, there were 1.47 million homes for sale, down 19.7 percent from one year ago.
Overall, NAR’s Chief Economist Lawrence Yun told CNBC that he is not too worried.
“First, we are seeing historically low mortgage rates combined with a pent-up demand to buy, so buyers will look to take advantage of these conditions,” he told the news outlet. “Also, job creation is improving, causing wage growth to align with home price growth, which helps affordability and will help spur more home sales.”
At a local level
In the Lansing area, REALTOR® Tracey Hernly, associate broker with Howard Hanna Real Estate Executives, says things are picking up after a slow couple of months.
“As soon as in-person home tours were allowed to resume, our phones started ringing,” she said. “There is a lot of pent-up buyer demand, but we are still facing a lack of inventory even with listings starting to tick back up. Over the past month, our absorption rates have been lingering between 1.6 and 2 months. To put that into perspective, a balanced market is typically when the absorption rate falls between 5 and 6 months.”
REALTOR® Frank Vicente with RE/MAX Finest says some sellers are waiting to list because of economic or financial concerns, while others may still be hesitant because of health and safety concerns. To that end, he assures all parties that REALTORS® are keeping safety as the number one priority.
“We’re limiting the number of people inside the home and we’re following proper precautions, including maintaining a 6-foot distance, wearing face masks and booties, and using hand sanitizer and gloves.”
Vicente says REALTORS® are also trying to limit contact with surfaces in homes by having only agents turn on lights or open doors.
“It’s definitely a different experience than we’re used to, but most buyers are happy to take the extra steps to ensure everyone is protected,” he said.
Despite proper safety precautions and increasing buyer demand, there is still a lot of uncertainty affecting the market. For instance, the pandemic’s impact on the economy has led to an increase in mortgage forbearance programs. This, in turn, means lenders are tightening up their restrictions and some government-backed loan programs are not as readily available as they were last spring.
Hernly says relocations also haven’t been as strong as they were in years past.
“We typically see a relocation influx, especially with Michigan State University,” she said. “However, we haven’t seen the usual traffic because of the uncertainty around in-person or virtual instruction.”
For those who are ready to enter the market, both REALTORS® agree that it’s more important than ever to have professional representation.
“Under the current market conditions, with so many unknowns and such low inventory, both buyers and sellers really need to work with agents who are on top of their game,” said Hernly.
Vicente adds that, “because things can change so quickly in today’s market, you need an expert who is looking out for your best interests.”
To find one of those trusted experts, visit the Greater Lansing Association of REALTORS® website at https://ift.tt/2pNzptA.
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June 04, 2020 at 08:09PM
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Has the Spring Market Sprung? COVID-19’s Impact on Real Estate’s “Busy Season” - Lansing State Journal
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