Will Covid-19 Reopening Create A Summer Home Sale Rebound
Q: Real estate sales have slowed a lot during the virus lockdown. Do you think real estate sales will continue to be slow for the rest of this year? Duncan, Greenwich, CT
A: Residential real estate buying is typically seasonal with the strongest sales usually occurring in the Spring. Since most of the US was in Covid-19 lockdown for most of the Spring, it is likely that the Spring homebuying spree will shift to later in the year. This shift in demand may in fact occur this summer in places like NJ where I operate that have effectively contained the virus-at least for now. Coronavirus mitigation will have an inordinate effect on the economy and real estate for the foreseeable future. The most powerful factor that affects residential real estate is supply and demand. Before Covid-19, in many places there was a shortage of housing inventory which increased competition and drove home prices higher. Even now as the pandemic lockdown slowly lifts, there are many more home buyers than there are houses to buy in the markets that I operate in due to a number of factors including the fact that some home sellers pulled their homes off the market when the pandemic began. Pent up demand may therefore create a summer home sales rebound as people who were planning to buy in the Spring jump back into the market and people get more comfortable going out again.
In addition to pent up demand and a continued housing inventory shortage, mortgage rates are at all time lows which are likely to juice home buyer demand even more. Thanks for your question, Duncan.
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