In an effort to get as much information as possible out there to my clients and those interested in the real estate market during these troubled times, here is some important information to keep in mind.
According to industry experts on the front lines (lenders and real estate people), home prices are expected to drop 2-3% in Q2 which is pretty incredible (many thought it would be worse but these new predictions are much better). Of course, as I always say it will depend on your specific area – here in San Diego County I do not think we will see anything more drastic as there are still buyers out there NOW and there is very little inventory.
Q2 is expected to be challenging with recovery starting in Q3 and Q4. There is an anticipated desire for people to buy surburban properties post COVID-19, with less demand in high-density cities, so this is good news for potential future sellers in suburban areas. Furthermore, if inventory is still low when the isolation is over and the market picks up, and if sellers are first out the door with listings, they may not see much of a price drop…keep in mind that there are always people who need to move!
All the above is all predicated on the assumption that current homeowners continue to make their mortgage payments. If homeowners misinterpret the new forbearance guidelines and stop paying, we could see the industry go in the opposite direction. There are many lenders and other industry leaders working with the Feds to make sure these forbearance programs are not abused, as they did not really provide specific guidelines (we don’t want people NOT paying mortgages unless they truly cannot).
SO…if you are a buyer or seller my recommendation is to hang in there a little longer. I will keep watching things develop and as soon as the stay at home order is lifted and businesses start to reopen I plan to list several properties. For now, if you are a seller it is a good time to declutter, freshen up any rooms that need it, plant flowers and spruce up your yard, work on curb appeal, clean everything and get as much ready as possible. For buyers, keep looking at homes online so you are familiar with the areas you desire – study neighborhoods and floorplans, watch virtual tours and be ready once we can all leave our homes to get out there and view properties.
We will all get through this together. Stay safe everyone, and stay home! A HUGE virtual hug goes out to all those who are still working so that the rest of us can eat and be healthy – THANK YOU to all the medical professionals, grocery store and bank workers.