Housing market sails into uncharted waters
You can depend on COVID-19 pushing the local prime home buying and selling season onto uncharted waters this year. In the short-term, you can rely on housing and economic data and news to change by the minute.
Data will not be much help sorting things out in the short-term because home sales, employment, and new home permits are lagging indicators. They describe what happened in the previous month. Pending sales are the exception. They are a forward-looking indicator – a preview of potential closing a month to 45 days in the future.
Stay focused and away from the detrimental effect of the barrage of economic news and outrageous opinions coming down the pike. The one thing real estate professionals are confident about is the housing market will weather this event. The local housing market is resilient, with consumer confidence being the driving force.
Prepare yourself. The odds are that April’s economic data could be troublesome. The numbers will reflect the first full economic effects of COVID-19 on the consumer portion of the economy.
Consumers are the key because they are the backbone of the economy. Their spending accounts for about 68% of the economy. This matter directly affects how consumers spend, where and when they can travel, and whether or not they are earning a paycheck.
Public policy is quickly moving to push back against some of the bites on consumers. That did not happen in the early days of the Great Recession. There is relief in place for homeowners who have federally insured mortgages and who suffer the loss of or a cutback in income. Many will be eligible to pay partial mortgage payments for at least a year. Help for landlords whose tenants are job-loss victims may also be available. The debt is NOT forgiven but postponed until the economy improves.
Real estate professionals and their economic advisors are hopeful that a housing rebound will begin in May and June. Local market watchers don not believe Tri-Cities area home prices will nosedive because inventory is tight. Eager buyers with the resources are still waiting for reasonably priced properties. It may sound odd, but the short-term market reset may work in favor of buyers with good credit and the resources to take advantage of a temporarily less competitive market. If sellers forego listing during this time, the low inventory situation may self-correct as the epidemic subsides.
As pointed out in last week’s blog, savvy consumers will stay in touch with a local professional REALTOR® during these turbulent times. That is important because local REALTORS® and their local trade association (NETAR) are the experts about what is happening in the local city and county markets.
NETAR is the voice for real estate in Northeast Tennessee is the largest trade association in Northeast Tennessee. It represents over 1,300 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries. Pending sales, monthly Trends Reports, and the regional market analytics are available on the NETAR website at https://netar.us/voice-real-estate-northeast-tennessee.