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Homebuyer Interest Down Due to COVID-19 Outbreak

A new survey from the National Association of Realtors (NAR) found 48% of realtors said homebuyer interest has fallen due to the outbreak of COVID-19. 

This number has tripled from the prior week when it was 16%. Sixty-nine percent said there’s no change in the number of homes on the market due to the virus, which is down from last week’s 87%. 

“The decline in confidence related to the direction of the economy coupled with the unprecedented measures taken to combat the spread of COVID-19, including major social distancing efforts nationwide, are naturally bringing an abundance of caution among buyers and sellers,” said NAR Chief Economist Lawrence Yun. “With fewer listings in what’s already a housing shortage environment, home prices are likely to hold steady. The temporary softening of the real estate market will likely be followed by a strong rebound once the economic ‘quarantine’ is lifted, and it’s critical that supply is sufficient to meet pent-up demand.”

The survey also found that 45% of members said the stock market correction and lower mortgage rates balanced, adding there is no significant change in buyer behavior. 

Additionally, 61% of those polled reported no change in sellers removing homes from the market, which is down from last week’s 81% a week ago. 

Four in 10 members said home sellers have not changed how their home is viewed while it remains on the market—down from the prior week’s 77%, or eight in 10 members.

Redfin previously reported that nearly one-third of homebuyers and sellers expect home prices to rise when the next recession hits—a reversal from earlier this year when 56% expected home prices to increase during the next recession. 

According to the survey, 25% polled in December said home prices in their area are expected to decline during the next recession. March’s numbers represent a steep increase to 44%. ‘

“It’s easy to become fearful when it feels like a recession is imminent, but it’s important to remember what has actually happened in past recessions,” said Redfin Chief Economist Daryl Fairweather. “Home prices declined substantially during the Great Recession, which started with a housing crash, but throughout the 2001 recession home prices actually rose due to a nascent housing bubble and a shift in investment dollars from the stock market into real estate. It’s perfectly reasonable to expect that a 2020 recession won’t stop home prices from rising since the supply of homes for sale is so constricted and mortgage rates are at all-time lows.”

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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