If humans have a couple of giant, recognizable traits, one would be adaptability, and the other would be being confusing. Regardless of the circumstances surrounding COVID-19 April home sales defied conventional logic, and our understanding of sales history.
Having 2 months of solid lock down, and not a predictable end in sight, one would expect all industries, especially housing, to start crumbling and possibly collapse. Who would want to risk going outside, and looking at someone else’s home when there’s a virus running rampant? Also keeping in mind that at any moment you could be told you no longer have a job, so couldn’t get a new home anyway. Why take that risk?
The turn of many realtors and associations towards tech, and virtual showings must have made a major impact because April home sales actually increased .6%. That may not seem like much, but we need silver linings where we can find them. This small increase could be the result of a few different things that maybe we can capitalize on.
First for the sake of safety, some people such as chief investment officer at Bleakley Advisory Group, Peter Bookvar think people are trying to get out of the large city centers, and head to rural areas. Not only for better social distancing to steer clear of the Coronavirus, but homes and land are cheaper.
Speaking of cheaper homes, the overall median home price dropped from $339,000 in April of last year to $309,000 this year. Knowing you have to pay a whole car less this year might incentivize you into that new home. Plus with inventory dropping from 331,000 in March to 325,000 in April, homes are running out pretty fast.
Even as the inventory quickly dissipates, newly constructed homes are still out there making up 1 in 5 sales which is up from 1 in 6 last year. Sure the number of homes being constructed and listed have slowed 13%, but not as drastically as existing home listings dropping 36.3%
As far as locations of the homes being sold, the South dominates with an increase of 4.7% in sales, while the others dropped 26.5% in the Northeast and Midwest, and 33.5% for the West.
We see a ton of ups and downs in all different sectors of the housing industry, without a lot of correlation between any of it. But home sales are up this month, and that’s something to be happy about.
Basically COVID-19, instead of throwing a wrench into the gears, added a couple of new ones we’re still trying to figure out. I guess keep your head up, and be as positive as possible; regardless of how confusing the markets, and we as people are, we can also adapt and be stronger in the end.