With the housing market staggered, to some degree, by the health crisis the country is currently facing, some potential purchasers are questioning whether home values will be impacted. The price of any item is determined by supply as well as the market’s demand for that item.
Each month the National Association of Realtors (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for the REALTORS Confidence Index.
Their latest edition sheds some light on the relationship between seller traffic (supply) and buyer traffic (demand) during this pandemic.
Buyer Demand
The map below was created after asking the question: “How would you rate buyer traffic in your area?” The darker the blue, the stronger the demand for homes is in that area. The survey shows that in 34 of the 50 U.S. states, buyer demand is now ‘strong’ and 16 of the 50 states have a ‘stable’ demand. With demand still stronger than supply, home values should not depreciate.
Seller Supply
The index also asks: “How would you rate seller traffic in your area?” As the map below indicates, 46 states and Washington, D.C. reported ‘weak’ seller traffic, 3 states reported ‘stable’ seller traffic, and 1 state reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is needed to satisfy the needs of buyers looking for homes right now.
As the map above indicates, 46 states and Washington, D.C. reported ‘weak’ seller traffic, 3 states reported ‘stable’ seller
traffic, and 1 state reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is needed to
satisfy the needs of buyers looking for homes right now.
What are the experts saying?
Here are the thoughts of two industry experts on the subject:
Mark Fleming, Chief Economist, First American:
“Housing supply remains at historically low levels, so house price growth is likely to slow, but it’s not likely to go negative.”
Freddie Mac:“Two forces prevent a collapse in house prices. First, U.S. housing markets face a large supply deficit. Second, population growth
and pent up household formations provide a tailwind to housing demand.”
Bottom Line for Relocation
Looking at these maps and listening to the experts, it seems that prices will remain stable throughout 2020. If you’re relocating
employees are concerned about home prices and are needing to list their home, our broker network of highly trained relocation
agents will know exactly what each market’s demands are. This is why we encourage our corporate clients to reassure their
transferees to partner with our preferred brokers. Our relocation agents specialize in working with relocating employees. With
shelter-in-place restrictions easing across the country, hiring the right agent is paramount. Educating the homeowner about key
market strategies will help them understand the difference of just “being on the market” vs. “being in the market” at such a critical
time as this.
Have questions or want to learn more about Lawrence Relocation Services, please contact Ginny Taylor, Director of Relocation Services, by email or by phone at 540.966.4550.