Market Update - Week 5 of Coronavirus
This is week 5 of our Shelter in Place and we want to give you a give you an idea of where the real estate market is today and our expectations for the near future. When we discuss the market, we are referring to the tri-county area of the Sacramento Valley (Sacramento, El Dorado and Placer counties).
- New Listings - New Listings have decreased by around 40% over the last month. We were expecting a busy spring with a significant increase in new listings, so this decrease is unexpected to say the least. At the same time, the lack of inventory is completely understandable as people that don't really need to sell immediately are waiting until it's safe to let prospective buyers into their homes.
- Pending Sales - Almost in lockstep with New Listings, Pending Sales have decreased by around 40%. This tells us that homes hitting the market are selling at about the same pace as they were before this craziness began, there are just less of them.
- Prices - Prices have held steady over the last month. The number of listings on the market (supply) is low. The number of buyers (demand) has decreased due to layoffs and the desire to wait. Supply and demand have balanced each other out, though, keeping prices steady.
- Buyers - While the pool of potential buyers has decreased, those still in the market are serious and really well qualified.
What does this tell us about the market today?
We are in what we would call a limited seller's market. Supply and demand have decreased by roughly the same amount, so there is still competition for homes that are priced well creating multiple offers. We call this "limited" because of the decrease in the number of transactions.
Where will the market be in 3 months?
Will summer be the new spring with a flood of homes hitting the market being snatched up by buyers that have been waiting on the sidelines? Or, will the number of potential buyers decrease as our economy recovers, creating a buyer's market for those still in the game? This is impossible to predict at this point. What we can tell you, though, is that the market was super strong when the pandemic hit and it will recover in the near to mid term.
If you ever want to talk through any of this information or just talk real estate in general, please reach out to us!