By Dan Hamilton
“Hey, Dan, how is the real estate market holding up through all of this?”
If I had a dollar for every time I’ve heard some version of this question over the past six weeks, I would be retired by now. It is only natural to want to know how one’s single largest investment is holding up during this time, so let’s take a look at the key indicators for the health of real estate.
Locally, inventory levels remain relatively low in relation to buyer demand, which continues to keep home values steady and rising. As long as inventory remains stable and buyer demand remains as it has for the past six weeks, we will continue to see home pricing remain steady and in some cases actually rise. Compared to this same period in 2019, there are only 1% more homes available on the market in the greater Greenville area, and homes under contract during the same time period are up 24%. Many buyers are having a difficult time finding homes for sale in the Upstate that meet their criteria.
My team recently listed a home in the high $300,000 range on the eastside of Greenville. The first day it was on the market, it had 23 showings and six offers. While this does not happen for every new listing we put on the market, we are seeing homes priced correctly in good condition sell very quickly.
Nationally, home prices are also staying firm. “Although the pandemic continues to be a major disruption in regards to the timing of home sales, home prices have been holding up well,” says Lawrence Yun, chief economist for the National Association of Realtors. “In fact, due to the ongoing housing shortage, home prices are likely to squeeze out a gain in 2020 to a new record high.”
Home buyer traffic is picking up again. We are also seeing indications that after the initial slowdown of in-person home shopping, the numbers are rising for buyers getting out and looking at homes on the market. According to ShowingTime data across the country, there was a decrease in home showings beginning the week of March 8. Since the week of April 5, we have seen a steady increase in the weekly number of home showings. More showings means more home sales.
Last, it is important to note that the fundamentals of real estate have been strong locally and nationally up to the time of the pandemic. While economic numbers indicate we are likely heading for (or rather, in) a recession, this is different than most past recessions. Any shift in real estate activity is a temporary effect of the coronavirus outbreak, rather than the cause of a recession as has been in the past. Therefore, most experts agree real estate transactions will return to normal levels as states begin to open back up.
“The housing market is temporarily grappling with the coronavirus-induced shutdown, which pulled down new listings and new contracts,” says Yun. “As consumers become more accustomed to social distancing protocols, and with the economy slowly and safely reopening, listings and buying activity will resume, especially given the record low mortgage rates.”
So, is it a good time to buy or sell real estate? As always, the answer to this question is dependent on many factors outside of current economic conditions. For those who need to buy or sell right now, the real estate market remains open for business. For buyers, mortgage interest rates are still historically low and reasonably attainable for those with active income and good credit. For sellers, low inventory means less competition for buyers’ attention and an abundance of qualified, motivated buyers. Local Realtors are here and available to help you safely and effectively navigate these unique and uncertain times.
Dan Hamilton is the operating principal of Keller Williams Greenville Upstate.