According to a recent report by the National Association of Realtors (NAR), [1]sellers aren’t budging when it comes to lowering home prices, as nearly 75% of NAR realtors have reported that sellers are not lowering their prices.
This choice to stay the course signals to NAR that sellers remain confident in the face of COVID-19. What many experts would assume would be a time wracked with panic selling due to the uncertainty of the economy and unknowns of the future, such resolve, and apparent optimism has come as a surprise to some, and a refreshing glimmer of hope to others.
“Consumers are mostly abiding by stay-in-shelter directives, and it appears the current decline in buyer and seller activity is only temporary, with a majority ready to hit the market in a couple of months,” NAR’s Chief Economist Lawrence Yun said. “The housing market faced an inventory shortage before the pandemic. Given that there are even fewer new listings during the pandemic, home sellers are taking a calm approach and appear unwilling to lower prices to attract buyers during the temporary disruptions to the economy.”
Also reported was that out of the large majority of residential tenants who are facing difficulties paying their rents, many have been accommodated by their landlords by approval for late payments, etc.
Twenty-seven percent of Realtors said they were able to complete nearly all aspects of transactions while respecting social distancing guidelines.
Despite sellers not raising prices, the Federal Housing Finance Agency’s (FHFA) Home Price Index (HPI) [2]found home prices rose 0.7% in February and increased 5.7% year-over-year.
January’s reported increase of 0.3% was revised to 0.5%. The national growth of 5.7% outpaces the growth of 5.3% in 2018-2019.
“U.S. house prices posted a strong increase in February,” according to Dr. Lynn Fisher, Deputy Director of the Division of Research and Statistics at FHFA. “The growth in home prices coincides with other data showing robust housing market activity in early 2020 preceding the current crisis. House prices had positive monthly gains in every census division. Transactions still do not reflect much, if any, influence from the COVID-19 outbreak as of February.”