As we take the time this month to look back at May, we can see two unmistakable and impactful truths. The first is that the coronavirus and efforts to slow its spread have affected every sector of our daily lives. The second is that despite early predictions of pessimism, the housing market has remained strong and steady. Although there was a decline in pending sales year over year, we are not alone in our optimism.
Lawrence Yun, NAR’s chief economist, says he sees improvement just around the corner. “… the real estate industry is 'hot' in affordable price points with the wide prevalence of bidding wars for the limited inventory,” Yun said. “In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about home buying in the midst of the social distancing measures.” To this end, NAR has even revised its forecast to reflect that optimistic viewpoint, with an outlook that includes prices increasing, rather than remaining flat.
Necessity being the mother of invention, real estate professionals like your own RE/MAX Alliance Associates have been artfully creative in assisting their buying clients and their selling clients to accomplish their desired outcomes with the least disruption to smooth, equitable real estate transactions.
Homeowners who had plans to sell this year are finding those plans do not need to be interrupted. During this time of uncertainty that resulted in high numbers of sudden unemployment, potential buyers, determined to move forward with ownership plans, have discovered that qualifying for a mortgage while receiving unemployment benefits is a very real possibility in many instances.
History of credit and employment is the key to making it happen. However, many employment situations fall within cycles, such as construction jobs. And there have always been loan programs to accommodate those types of employment cycles. With some of the lowest mortgage interest rates in decades, no wonder everyone wants to make their home purchase this year rather than wait and chance rates increasing.
Even with new home permits tumbling upwards of 30% in some areas, this is certainly one of the best reasons that real estate has remained solidly stable throughout most of the Front Range region.
Looking through these trends into what June may bring, we see similar numbers that will compete favorably with May as we move from spring into the summer season.
Although the volume of newly listed properties is down 43% nationwide, the Colorado front range area is holding steady compared to inventory levels year over year. For May, there were 9861 total homes on the market. Of those homes offered for sale, 4553 sold and closed! Days on Market has remained the same averaging 32. However, yet another positive sign is the average sale price of $516,240 compared to $515,910 one year ago, and minus social distancing practices being in play.