{"id":718,"date":"2020-04-27T13:50:20","date_gmt":"2020-04-27T13:50:20","guid":{"rendered":"http:\/\/phphouses.com\/blog\/?p=718"},"modified":"2022-07-04T23:53:27","modified_gmt":"2022-07-04T23:53:27","slug":"impact-might-covid-19-home-values","status":"publish","type":"post","link":"https:\/\/phphouses.com\/blog\/impact-might-covid-19-home-values\/","title":{"rendered":"What Impact Might COVID-19 Have on Home Values?"},"content":{"rendered":"
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What Impact Might COVID-19 Have on Home Values?<\/p><\/div>\n

A big challenge facing the housing industry is determining what impact the current pandemic may have on home values. Some buyers are hoping for major price reductions because the health crisis is straining the economy.<\/p>\n

The price of any item, however, is determined by supply and demand, which is how many items are\u00a0available<\/strong>\u00a0in relation to how many consumers\u00a0want to buy<\/strong>\u00a0that item.<\/p>\n

In residential real estate, the measurement used to decipher that ratio is called\u00a0months supply of inventory<\/em><\/strong>. A\u00a0normal market<\/strong>\u00a0would have 6-7 months of inventory. Anything over seven months would be considered a\u00a0buyers\u2019 market<\/strong>, with downward pressure on prices. Anything under six months would indicate a\u00a0sellers\u2019 market<\/strong>, which would put upward pressure on prices.<\/p>\n

Going into March of this year, the supply stood at three months \u2013 a strong seller\u2019s market. While buyer demand has decreased rather dramatically during the pandemic, the number of homes on the market has also decreased. The recently released\u00a0Existing Home Sales Report<\/a>\u00a0from the\u00a0National Association of Realtors\u00a0<\/em>(NAR) revealed we currently have 3.4 months of inventory. This means homes should maintain their value during the pandemic.<\/p>\n

This information is consistent with the research completed by\u00a0John Burns Real Estate Consulting<\/em>, which recently reported:<\/p>\n

\u201cHistorical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices).\u201d<\/em><\/p><\/blockquote>\n

What are the experts saying?<\/strong><\/h4>\n

Here\u2019s a look at what some experts recently reported on the matter:<\/p>\n

Ivy Zelman,\u00a0President,<\/em>\u00a0Zelman & Associates<\/em><\/a><\/p>\n

\u201cSupported by our analysis of home price dynamics through cycles and other periods of economic and housing disruption, we expect home price appreciation to decelerate from current levels in 2020, though easily remain in positive territory year over year given the beneficial factors of record-low inventories & a historically-low interest rate environment.\u201d<\/em><\/p><\/blockquote>\n

Freddie Mac<\/em><\/a><\/p>\n

\u201cThe fiscal stimulus provided by the CARES Act will mute the impact that the economic shock has on house prices. Additionally, forbearance and foreclosure mitigation programs will limit the fire sale contagion effect on house prices. We forecast house prices to fall 0.5 percentage points over the next four quarters. Two forces prevent a collapse in house prices. First, as we indicated in our earlier research report, U.S. housing markets face a large supply deficit. Second, population growth and pent up household formations provide a tailwind to housing demand. Price growth accelerates back towards a long-run trend of between 2 and 3% per year.\u201d<\/em><\/p><\/blockquote>\n

Mark Fleming,\u00a0Chief Economist, First American<\/em><\/a><\/p>\n

\u201cThe housing supply remains at historically low levels, so house price growth is likely to slow, but it\u2019s unlikely to go negative.\u201d<\/em><\/p><\/blockquote>\n

Bottom Line<\/strong><\/h3>\n

Even though the economy has been placed on pause, it appears home prices will remain steady throughout the pandemic.<\/p>\n

Contact us:<\/strong>
\nPHP Houses
\n142 W Lakeview Ave
\nUnit 1030
\nLake Mary, FL 32746
\nPh:\u00a0(407) 519-0719<\/span>
\nFax:\u00a0(407) 205-1951<\/span>
\nemail:\u00a0info@phphouses.com<\/p>\n

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THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"

Home Values Finish Reading What Impact Might COVID-19 Have on Home Values?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[69],"tags":[123,124,125,132,18,138,83,25,66,49,170,42,169,63,20,12,24,48,13,28,47,19],"_links":{"self":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/718"}],"collection":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/comments?post=718"}],"version-history":[{"count":1,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/718\/revisions"}],"predecessor-version":[{"id":720,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/718\/revisions\/720"}],"wp:attachment":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/media?parent=718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/categories?post=718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/tags?post=718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}