By many measures, the housing market showed stability at the start of 2020. In February, construction numbers rose and sales surged, beginning the busy real estate season strong, and contributing to overall positive sentiment this year.
Contracts gained ground, as well, the National Association of REALTORS® reported this week, with pending sales up 2.4 percent in the Pending Home Sales Index, based on contract signings. On an annual basis, contracts rose 9.4 percent, and in all four major regions in the U.S.
Now, as global health is threatened, so, too, is the healthy housing market. The coronavirus’ effects may potentially soften, according to Lawrence Yun, chief economist of NAR, due to the economic stimulus. While there will be fallout undoubtedly, how deep the impact remains unclear.
“February’s pending sales figures show the housing market had been very healthy prior to the coronavirus-induced shutdown,” says Yun. “Numbers in the coming weeks will show just how hard the housing market was hit, but I am optimistic that the upcoming stimulus package will lessen the economic damage, and we may get a V-shaped robust recovery later in the year…Once this predicament is behind us and the habit of social distancing is respected, I’m encouraged there will be continued home transactions though with more virtual tours, electronic signatures, and external home appraisals.”
Recently, the Federal Housing Finance Agency announced flexibility to mortgage requirements, allowing appraisal “alternatives,” among other provisions. Broadly, the industry is leveraging technology in transactions, especially e-signature and virtual walk-throughs.
If the coronavirus nets a quieter spring, Yun anticipates buyer demand to unleash, but later in the year.
“Many of the home sales that are likely to be missed during the first part of 2020 may simply be pushed into late summer and autumn parts of the year,” says Yun.
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Suzanne De Vita is RISMedia’s senior online editor. Email her your real estate news ideas at firstname.lastname@example.org.