So the country is in a constant shifting landscape of information, with some of it seeming to contradict each other. Just yesterday I wrote about how home sales actually increased in April in the midst of COVID-19 confusion, but here I am again to inform about a drop in pending home sales. I have to keep you on your toes, because like I said yesterday, humans are experts in adapting and being confusing.
The National Association of Realtors (NAR) has studied massive quantities of data every month to track the real estate market since starting way back in 2001, and this month set a record for the greatest decline in contract signings since then. Year-over-year it fell 33.8% to an index of 100, this means compared to last month they fell 21.8%.
Dr. Lawrence Yun, NAR’s chief economist said of the pending home sales decline, “With nearly all states under stay-at-home orders in April, it is no surprise to see the markedly reduced activity in signing contracts for home purchases.”
But he also has high hopes because of many factors coming up saying “In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about homebuying in the midst of the social distancing measures.”
This optimistic view comes from Flash Surveys the NAR conduct to find what Realtors are experiencing, and 34% reported successfully completing almost all aspects of transactions while following social distancing.
People still want homes, and Coronavirus isn’t going to stop some people. Especially if it’s moving to more rural parts of the country where in the South and the Midwest the decline was only 15.4% and 15.9% respectively, as compared to the West which dropped 20% and a whopping 48.2% in the Northeast.
Yun also is surprised by the data from time to time, “Given the surprising resiliency of the housing market in the midst of the pandemic, the outlook for the remainder of the year has been upgraded for both home sales and prices, with home sales to decline by only 11% in 2020 with the median home price projected to increase by 4%, In the prior forecast, sales were expected to fall by 15% and there was no increase in home price.”
So all in all even if pending sales decreased, prices fall, but also inventory drops, it’s easy to say the future holds – question mark?