By Mike Rains, May 12 2020 02:09PM
A picture they say is worth a thousand words. This picture shows us that things are starting to head in the right direction. As you notice on the graphs, the forced stay at home order abruptly changed the direction of what was to be another historic year for the housing market. The year started off with very low inventory, coming off a year where home prices hit all-time highs, and through February, were marching towards a record 1st Quarter, with low interest rates and buyer demand was very strong!
Then you see abrupt changes in direction for demand, which is measured in pending home sales. This is directly caused, not by a faulty economy or a financial meltdown, but as a forced shutdown to fight the spread of Covid-19 CoronaVirus. Homes in escrow continued for the most part, closing escrow, but few new escrows were being opened on new sales for two months as a result of the shutdown. It is very important to realize as a home owner, a buyer looking to buy, or an investment property owner that this temporary shut down is the cause of this pause in the market. We have NOT seen prices falling, and that is because sellers pulled their homes off the market in most cases, and with a very low supply coupled with a low demand, those two have been balancing each other out.
Now I know that there have been homes that sold for less than their asking price, but would it surprise you that in the last 60 days, that is the 2 months that we have been locked down, there has been just over 3135 homes that closed escrow, and have closed for 98.45% of their asking price? Well that is the numbers for Orange County, California across Detached and attached homes. My friends, your home is a fantastic investment and while there are situations that differ from what we are seeing, but these are the numbers. These are the facts on the ground and they demonstrate that you will do ok as our county, state and country begin to re-open its doors again. Senior economist Lawrence Yun has indicated recently on a podcast interview on the Brian Buffini Show, a real estate coach and trainer, that both buyers and sellers interviewed simply have delayed their purchase during this time and we will see the spring market shift to summer and summer to fall and that by the end of the year leading into next year, the national real estate market picture will demonstrate the strength of housing in the midst of this storm.
As always, fight fear with facts and get your advice from trusted resources. I am Mike Rains with Remax in Huntington Beach, CA. Stay safe and know that this too shall pass.