Notably we are in uncharted times — and economically speaking — very uncertain times. Statistically, the housing market in February 2020 over last year was even, however, sales will be noticeably be down during the months of April and May, which is due to the government-imposed lockdown, and not the normal economic cycle. With the economy shut down we will get negative figures on some of the activity.
Local home prices have still been rising — the economy was very strong before the COVID-19 — and unemployment has spiked, but this is temporary. Once everything is open again, you will see most businesses back at full speed and see people going back to work therefore unemployment will drop and people will get back to work.
The bigger hit like the cruise lines and the airlines will be the hardest and slowest to recover from this pandemic. People fear we are going to have a housing market crash again, and it is very easy to presume, however, when you look at the2008 situation it was completely different then.
Well, the facts are:
- The mortgage industry structure of loans is now completely different, and housing lenders are not giving the subprime loans to anyone anymore. There are strict lending guidelines in place to prevent this.
- This time people must really qualify now to get a loan.
- Homebuilders overbuilt back then, too, and now there is an industry shortage of homes. In fact, there has been a shortage for some time for both new homes and resale.
- During the pandemic, residential construction was halted, and fewer homes were listed, which has created even more of a shortage. We do not expect the mortgage interest rates to blow up, either.
- The Federal Reserve went all in back in 2008/09, and it took them eight months to reduce the rate.
- This time they went in all at once and they reduced the rates altogether.
- Homeowners are sitting on wealth. There has been a great appreciation for homeowners over the last three years. Even if there is a five percent price correction in the housing market, most homeowners will absorb that. If there is a decline it will be very temporary, even as we are in an inventory shortage this is still healthy for homeowners.
- Buyers and sellers are sitting waiting for the economy to be opened once that happens I see a surge in listing inventory and buyers will be back out shopping for a home, then it will even back out in the following months to a steady strong Clark County real estate housing market.
- Even though home prices have risen, the interest rates are historically low, so still affordable for buyers.
- Buyers will continue to move to affordability, benefiting mid-sized markets.
We came into this in a strong market and I believe there is great cause for optimism coming out. I hope this gives you an insight on the real estate market. If you have any questions, please do not hesitate to reach out to me anytime or visit www.clarkcountyrelocations.com
Written by Louise James