Looking to buy or sell a house? Here’s what experts say about plunging housing market
BY BROOKE WOLFORD
JUNE 22, 2020 05:22 PM , UPDATED JUNE 22, 2020 06:49 PM
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Every corner of the country saw a major decline in housing sales for a third-straight month in May, especially those hit hardest by the coronavirus pandemic, the Associated Press reported.
The National Association of Realtors says while spring is usually the busiest time of year for real estate, this year saw the lowest sales in a decade, according to the Wall Street Journal. Only 3.91 million properties sold, with sales of previously-owned homes dropping by 10% compared to April and falling about 27% from the same time in 2019, CNN Business reported.
“Sales completed in May reflect contract signings in March and April — during the strictest times of the pandemic lockdown and hence the cyclical low point,” Lawrence Yun, the chief economist for the National Association of Realtors, said, according to CNN.
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Sales declined at different rates in different regions, according to AP. The Northeast, which was hit especially hard by the pandemic, saw sales drop by 13% between April and May and 30% compared to the previous year, CNN reported.
But while sales plummeted in March, April and May, the market is rebounding this month and experts expect sales to continue increasing, according to Bloomberg.
“We hit a low point in the month of May, [but] it looks like quite a sharp rebound ahead,” Yun said, according to WSJ. “It looks like a V-shaped recovery for the housing sector.”
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Housing prices have increased as well. The median price for a previously owned home rose about 2.3% to $284,600 from a year ago, Bloomberg reported. Prices have stayed high because there’s a shortage of homes on the market, according to WSJ.
The decrease also hit different types of homes in varying degrees, with condo and co-op markets taking the biggest hit and dropping 12.8% in May compared to the previous month, Bloomberg reported. Single-family home sales dropped 9.4% between April and May, according to Bloomberg.
“There could be a permanent change about the preference for the suburbs and single-family homes not only because of during this pandemic period but more importantly the permanent change” to remote work, Yun said, according to Bloomberg.
Growing interest in moving to the suburbs could propel the market in the short-term, CNN reported.
“We still expect a strong recovery this summer, which has already started to be fueled by people moving from cities to suburbs as work-from-home becomes policy at many businesses,” Robert Frick, corporate economist at Navy Federal Credit Union, told CNN. |
