How is the real estate market performing as we navigate changes due to COVID—19?
Data from Goldman Sachs, JP Morgan, Morgan Stanley
As your trusted advisors for real estate, we have an update for you on the real estate market and how is it fairing with Covid—19. In the past 10 days, we have seen some rebound, listings and showings are up in the median-priced market segment We understand that uncertainty and fear create indecision, and we are striving to provide information that will help you as we navigate through these difficult times.
What can history tell us about the upcoming recovery?
Let’s review…
Economists are telling us that we are only seeing a pause for our economy, mainly because this is not an economically driven event for our economy. Major financial institutions (Goldman Sachs, JP Morgan, Morgan Stanley) are calling for a rapid “V” type recovery for this event vs what we see in a typical recession that is a “U” type, this is where a recession or drop off rides along the bottom for about 9-15 months, and then we come out of it slowly, most of you will remember our last Great Recession as an example of this.
Experts expect a sharp increase when the fear is over and here is why. Historical analysis shows us that we can expect a strong recovery after Covid-19, because, after epidemics such as SARS, the 1968 Hong Kong Flu (H3N2), the 1958 Asian Flu (H2N2), and the 1918 Spanish Flu, we saw a sharp recovery once the virus was contained. These recoveries happened quickly enough to provide very little damage to home prices. Analysis by our Information Management Team is showing that the current slowdown is playing out in a similar pattern so far.
Still a sunny outlook…the Z report has pulled back on appreciation for 2020, but in reality, we are just seeing our demand pushed out a bit, and you see an increase for 2021 in the appreciation forecast, and 2022 is showing strong expectations.
Zelman & Associates is respected industrywide for accurate analysis and unparalleled depth of insights. The Zelman team stands alone for its unbiased views, depth of data and knowledge, and a willingness to offer high-conviction, counter-consensus opinions when necessary.
From Ivy Zelman, in the latest Z report, she notes an expectation for home price appreciation to decelerate from the current 2020 levels, although easily remain in positive territory given the beneficial factors of record-low inventory and a historically-low interest rate environments. Note in the Central Ohio/Greater Columbus area, our inventory is still only a 30 day supply, a very strong market.
The Z report has been updated for 2020 and is basically showing a sunny outlook, the Z report shows appreciation for 2020 at 3% which is still positive, although she has pulled back slightly on this year’s appreciation percentage, she expects the market to outperform her initial outlook for 2021, and shares we are just pushing appreciation out a little farther. and she has added her outlook for 2022 which is also predicting strong appreciation reaming at about 4.5%.
So if you are selling or buying, we expect to see the continuation of a healthy housing market. Reach out to us with questions, we are here to help.
We may not all be in the same boat, but we are in the same storm and WE Are Better Together.
Reach out to us anytime.
Help us continue to support the Mid-Ohio Foodbank! We are continuing our support through a Virtual Food Drive between April 21st and May 12th, 2020. Our Coldwell Banker region will match up to $5,000 of donations collected! Click the link (or cut and paste it into your browser) to help support the Mid-Ohio Foodbank:
Coldwell Banker King Thompson has been a long-time supporter of Mid-Ohio Foodbank and we would like to continue that support through a Virtual Food Drive between April 21st and May 12th. Coldwell Banker King Thompson will match up to $5,000 of donations collected!
The Foodbank appreciates Coldwell Banker King Thompson's support as we respond to the COVID-19 crisis.
Thank you!
