Home Buying Demand Drops Due to COVID-19

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As the country slowly adjusts to life under the threat of COVID-19, the housing market has taken a hard hit. A new “Economic Flash” survey from the National Association of Realtors shows that an astounding 90 percent of realtors say home buyers’ interest in purchasing homes has fallen in recent weeks.

Let’s show that shocking number in context. According to the same survey, in March of 2019, only 48 percent of realtors said that interest in buying homes was falling. The Coronavirus situation has affected the number of houses on the market, as well. Almost 80 percent of the real estate agents surveyed said that they’ve noticed sellers pulling their homes off the market.

Here’s what you need to know about how home buying demand has dropped due to COVID-19 and how you can still sell.

Market Conditions: It’s a Slowdown

The market began to slow in late March and coincided with historic numbers of Americans claiming unemployment in many states. A crash in consumer confidence and an extremely volatile stock market didn’t help to calm the waters. Mortgage loan applications plunged, as well. The volume of applications falling by 33 percent year-over-year, as found by the Mortgage Bankers Association Weekly Mortgage Applications Survey.

Home buyers are spooked, and many economic experts believe the uncertainty will continue into the indefinite future. The National Association of Realtors survey also found that 59 percent of buyers plan to delay their home purchases for at least a few months.

It’s easy to understand why. With economic uncertainty reaching new levels, many Americans are concerned about losing their jobs and don’t want to take a chance on a traditional home purchase. Unfortunately, this leaves home sellers in a not-so-desirable position.

To illustrate the situation further, let’s look at an example of the current state of the housing market in southern California.

Southern California Housing Market Conditions

Both the San Diego and Los Angeles, California housing markets have been especially impacted by the Coronavirus. In San Diego, new home listings have declined by 27 percent from April 2019, and over 10 percent in the last month.

In Los Angeles, the news is even more dramatic. While new listings have also declined by 27 percent year-over-year, listings have dropped by a whopping 19 percent over just the past month.

Keep in mind that early spring is usually prime home buying and selling time. Across the nation, home listings have dropped by 19 percent since the same time period in 2019.

But it’s not just listings that are feeling the heat. Not surprisingly, the California Association of Realtors has reported an 11.5% drop in actual home sales in March when compared to the previous month’s numbers. This is the first double-digit drop since 2007.

Rapidly changing economic conditions — especially the historically high unemployment numbers — mean uncertainty is likely to continue for some time. Market analysis concludes that many home buyers are simply taking a “wait and see approach.”

This is bad news for those who wish to sell their home the traditional way, as not all home sellers have the luxury of waiting out these rocky market conditions. Many home sellers need to sell immediately, regardless of unemployment numbers or pandemic conditions.

While some sellers can “wait and see” what happens to the market, many need or want to sell now. For these home sellers, there’s just not time to wait out the pandemic and recession.

Fortunately, there’s an alternative: Sell to HomeGo. We’re still buying homes; we pay cash and we close quickly. Best of all, we buy homes in any condition. You don’t even need to worry about preparing your house for sale or showing your home, as our agents have transitioned to virtual walk-throughs for your safety and convenience.

What if you want to sell, but you’re not ready to move out right away? HomeGo offers a flexible leaseback program, so you can stay in your home until the time is right to move into your next home. That means you can close quickly to get the cash you need, but move out when you’re ready.

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