The question has been asked ever since the recovery began from the last crash in 2008. Now we are in the midst of a global pandemic that is taking a toll on the US economy and is being felt here in San Diego. The questions seems more relevant now than ever. The answer to this question, at least for now, is no.
The housing numbers reported by the Union Tribune 5.19.2020 in an article reporting the “nosedive” in sales volume show that the number of homes for sale in San Diego is historically low with sales in April being down about 30% from the same time last year. It’s no mystery that COVID-19 caused many home sellers to pull their homes off the market while the country got a grip on the monumental changes brought on by the pandemic. Nevertheless, home sales continue and are seeing a bounce back in recent weeks with more listings coming on the market and mortgage rates continue to remain low. The easing of restrictions has also seemed to spur more confidence in the buyers I continue to work with and I show homes regularly with all precautions still in place.
In fact, one of the by products of the current conditions is that many first time home buyers are encountering multiple offer situations for the homes currently hitting the market. In other words, demand for housing has remained steady in spite of the pandemic. What remains to be seen is how the local, state and federal governments manage the economic recovery. After all, home sales can happen only when people have access to capital.
The figure that continues to worry me is the unemployment rate. With unemployment for April being at almost 15% nationally, the foundation of the economy is shaking. If we cannot correct this, there may be deeper consequences felt here.
In the short term however, the housing market contraction in sales is a direct result of the pandemic and the push forward to continue with home sales remains driven by the sound market forces of the buying and selling public. There are no weird loans swirling about, foreclosures are still in record low territory, and banks have decided that it is wiser for them to keep homeowners in their homes to weather this storm. Some price corrections are happening and some homes that were under contract have fallen out due to COVID-19 related circumstance (i.e. loss of job, increased credit score requirements, health issues, fear).
If you have any questions about the real estate market in the age of COVID-19 don’t hesitate to reach out.
