How has the housing market been affected by covid-19? What has changed since our last residential real estate report at the beginning of March 2020? In this video, I discuss our local housing market in more detail and also talk about the federal mortgage relief that is being offered to people who have been affected by the coronavirus from mortgage forbearance to the $2 Trillion Economic Stimulus Package that was recently passed.
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What has changed since our last Real Estate Market Report?
At the start of March our Real Estate market was in beast mode and on pace to have one of our best years ever but then just a few weeks in that all changed with the introduction of covid-19.
The first few weeks of covid-19 didn’t impact the housing market too much as new listings continued to come on the market along with buyers putting homes into escrow. With that said the last 2 weeks I have seen more of a shift in the real estate market with a drop in inventory as well as buyer demand.
The drop in buyer demand could be attributed to a few factors. Not only have buyers likely pulled out of the home buying process due to uncertainty from covid-19 but also there has been a rise in interest rates during this same time which has likely put some buyers in a position where they no longer qualify for the same amount as before.
The lack of inventory has been an ongoing issue within our housing market for a few years and concerns with covid-19 is only making it worse with homeowners scared to list their homes during this time of uncertainty. That coupled with homes being removed from the market at the same time has caused our inventory levels to drop significantly in the last few weeks.
In addition to the buyer demand and inventory issues, we also went through a period where real estate in california wasn’t considered an essential business which meant that we shouldn’t be doing real estate related activities like open houses, showing property, etc…..during the shelter in place. While that has changed as of this week, my company, Coldwell Banker Realty, is still stressing that we should hang tight with regards to doing business as usual.
With all of that said, our local housing market has pretty much stalled in the last few weeks. There are still deals going into escrow and listings still coming on the market but the majority of buyers and sellers seem to be waiting on the sidelines to figure out what is going to happen before moving forward during this time of crisis.
Will the housing market crash?
My personal opinion is that the real estate market will NOT crash. I do expect our economy will suffer with the loss of jobs and spending and we’ll likely see housing pull back some in the interim but I expect that as we move out of the covid-19 concerns, our housing market will remain strong for the foreseeable future. I don’t mean that we are going to see the appreciation or gains that we’ve seen over the last few years but with low inventory and low rates, our housing market should recover at a faster pace than most industries.
What is a mortgage forbearance?
A mortgage forbearance agreement is an agreement made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a mortgage plan that will, over a certain time period, bring the borrower current on his or her mortgage.
Who can qualify for mortgage forbearance?
Homeowners who have lost income or their jobs due to covid-19 could be eligible to have their mortgage payments delayed or reduced for a few months. You will need to contact your lender and explain your situation to see what options are available to you at this time.
As I suggest in the video, I would continue to call and check in with your lender as I expect the options to change if the virus continues to spread and more people are effected.
Do you have questions about the local real estate market? If so, please comment below or contact me directly as I’d love the opportunity to help.
Thank you for watching.
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