Covid-19 has hit businesses hard. Consequently, many people have lost their jobs, and worse, others have succumbed to depression. Moreover, there are those who, for different reasons, desired to move to California. But due to the COVID-19 pandemic, they have had to halt their migration plans.
What’s more, most of them have dreaded the housing market since Coronavirus seems to deteriorate the market.
That’s why Jean Danhong Chen, shares ways the housing market in California has changed during the COVID 19 pandemic. You can make informed decisions regardless of whether you’re a real estate investor, a home seller, a home buyer, or just someone with great interest in the housing industry.
A Drop in Buyers’ Interest
Immediately the government announced the COVID-19 pandemic attack in California; realtors canceled their open houses. Consequently, 50% of agents reported a drop in buyers’ interest in their properties. More than half of reactors said to have buyers who backed out from their home-buying plans for fear of COVID 19 pandemic. Additionally, 45% of the realtors had sellers who backed out from selling their property.
The shutdown of Non-Essential Businesses
The government shutdown any business deemed as non-essential. As such, the real estate business wasn’t seized. But the government allowed some real estate transactions to continue. Such transactions included home buying, residential leasing, title research, and renting.
Shelter-in-place Orders
As Jean D. Chen reports, the shelter-in-place orders vastly contributed to the freezing of California’s housing market. What’s more, though the government allowed financial institutions to continue their operations, many people were afraid of taking loans to buy homes. Furthermore, the shutdown of around 80% of the country fueled the fear in people. As a result, the country experienced a 30% fall in mortgage application in the last quarter of march 2020.
The Good News
For many states, the home sales bounced back in June. And realtors and landlords were super excited. What’s more, the sales price to list price ratio was 99.5% in the same month (June). So, home sellers were selling their homes at prices close to the listing price.
More Handy Stats
In that same month of June, home sellers sold their homes at around $626,160. Moreover, single-family home prices rose by 6.5 percent from May (2020). The month to month sales increased by about 68.55% while the California condo prices rose by 4.6%. This seemed a slow recovery for the housing market.
Buyer activity Increased!
Some financial institutions lowered their mortgage rates like never before. As a result, many people took advantage of the low mortgage rates, and they bought houses. Consequently, realtors reported an increase in buyer activity.
More of the Rebound
To get a more vivid picture of the housing market’s state of pre-COVID-19, let’s have a glimpse of the market performance as in February (in 2020). In February, the housing market experienced a 6.6% rise. As a result, the home sales jumped above 400,000 benchmarks. This was a remarkable and rare occurrence; it marked the completion of an eight consecutive months year-over-year home sales increase.
Home Sales
All major regions of California experienced an increase in home sales. However, Southern California experienced a drop of -12.2 percent while Central valley experienced the smallest drop of -1.5 percent. But generally, the median prices of homes in all the major regions of California increased drastically. And to some extent, this showed that the homes were affordable for many residents, as Jean Danhong Chen reports.
The Housing Supplies
Housing suppliers decided to play safe. Consequently, the housing supply across the state declined. All countries in the region experienced a housing supply drop of at least 30 percent, with Southern California getting the most significant drop.
Over to You
Probably, you have noted that by June, the home prices were affordable for many. And this is a “voila!” moment for all folks who desired to migrate into California, but they were afraid of the shaky housing market.
But now you got these handy stats on your hands. Apart from the immigration-related constraints, what else stands on your way to making your desired big move—acquiring a home or investing in the housing market?