When will the home prices start going down as a result of COVID19?

By
Real Estate Broker/Owner with Cam Realty and Property Management

When will the home prices start going down as a result of COVID19?

We all know real estate is local. By reading the market data for the West Coast, there’s no way a home buyer would learn what the real estate market is doing in Central FL.
There are many factors that affect home prices to go up or down in any market. One of them is DEMAND.

I read many posts on social media from real estate professionals who seem to think home prices are on the decline. While this might be true for some parts of the country, it hasn’t been the case for the majority. On the contrary, home prices continue to rise, at least in Central FL.

Yesterday, I had a conversation with a home buyer who wanted to see a home that came on the market nine days ago, listed at $380,000. Since she is a cash buyer, she asked if the seller would be insulted with a $330,000 offer. After looking at the comps, I advised this home buyer the home was priced just right, within the market value and my suggestion would be to first preview it and if she wanted to make an offer, not to go below asking. When I contacted the listing agent, I was advised it was under contract which I relayed to my buyer client. She is a new client whom I never worked before so I don’t know her that well. Apparently, a family member of hers is a real estate professional who has been giving her advice. I’ve seen this happen before and its usually not a good sign, especially if they live in a different state. They can certainly make assumptions but none of us can say for certain home prices will be declining in result of all the shut-downs due to Coronavirus.

I have been a REALTOR® for 18+ years and never have I advised a buyer or a seller not to buy or sell a home because of my assumptions. Not a wise thing to do regardless of the circumstances because we just don’t know. Imagine if a buyer client listened and not purchase a home at this time when the interest rates are low and six months down the road, home prices have climbed up and interest rates are higher. Homebuyers and sellers, we talk to take our advice to heart and may act based on our “assumptions”. Our job is to help them market their homes and assist them in finding their dream home. Most of us are not economists nor should we play the role of one in the real estate field.

I can tell you there were very minimal showings in Central FL during the shut-down but even then, homes were selling. I personally sold and closed three homes during that time.
Sadly, there are some buyers who are waiting for the home prices to drop within the next few months due to the pandemic. Will that really happen? We shall watch the market and see. The best thing we could do for the consumer is to report real data, not assumptions.

If you are looking to buy or sell a home in Clermont, Minneola, Groveland, Mascotte, Winter Garden areas, I would love the opportunity to speak with you. Call or text me at 407-929-1852, email bethatalay@gmail.com or visit www.WhereToLiveInOrlando.com


When will the home prices start going down as a result of COVID19?

 

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Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. MaryKay Shumway 07/20/2020 11:02 AM
  2. Joe Jackson 07/21/2020 08:11 AM
  3. Brian England 07/22/2020 01:11 PM
  4. Ginger Harper 07/24/2020 11:51 AM
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Rainer
297,333
Paddy Deighan JD PhD
TimeshareLawyers.pro - Vail, CO
Paddy Deighan J.D. Ph.D

ahhh yes the proverbial out of market real estate expert...I wonder how many deals these experts have ruined for friends and family members??

Jul 22, 2020 01:12 AM #48
Rainmaker
338,860
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

All real Estate is local ~ but most markets seem to be having an inventory shortage currently. Our job as an agent is to inform the Buyers and Sellers of current market conditions and let them make their decision based on the information provided. I never try to forecast way into the future, but what goes up must come down at some point.

Jul 22, 2020 03:57 AM #49
Anonymous
Tom and Yvonne Phelan

My wife and I deal with Miami Investors (she's a Florida real estate Broker) who like Cape Coral Florida SFH rentals. My hardest task is to get them to move quickly. Often, after procrastinating for a day or two, the Investor says "Let's do it" but the property is sold after receiving multiple Full Price+ Offers.

Jul 22, 2020 04:23 AM #50
Rainer
75,485
Cathy Starkweather
La Rosa Realty, LLC. - Celebration, FL

Like you Beth, I'm in the same area and similar frustrations with unrealistic buyer perceptions. Market numbers are the facts, that's what I share. I recently had a buyer during COVID who's gone dark... I'll assume it's because of her friend in Iowa giving her market advise. We viewed three homes, all under contract within 24 hours while she "thought things over," and questioned the comparables. Oh well, I had a feeling about this one... those feelings are usually right! :)

Jul 22, 2020 06:01 AM #52
Anonymous
Alan trauger

With the low interest rates and low inventory levels, home prices will remain steady. I am in the Orlando Florida area and have started noticing that sellers are reducing sales prices, although I believe the listing agent was too aggressive in the initial pricing. If the home is priced correctly, it will undoubtedly sell near at list price.

The article was very good and timely for this time in history and economic times. Unlike prior economy downturns, this was created due to a prescribed slowdown, not crazy lending practices and over supply.

Jul 22, 2020 06:06 AM #53
Rainmaker
581,169
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Prices are not falling in the areas I work in the Kansas City metro -- quite often, multiple offers.  Isn't it enough that interest rates are at historic lows?  I do sympathize with you when the "friend" or relative is also in real estate in another location--not the same !!

Jul 22, 2020 08:12 AM #54
Rainmaker
290,003
Randal Jenkins
Coldwell Banker F I Gray and Sons Residential, Inc. - New Port Richey, FL

When the pandemic hit, we all tried to figure out what would happen to the markets. 

The stock market went down on Mar 20 to around 19000, but promptly went back to the 25000’s and we were all in awe.  Who saw that coming?

The real estate market moved along at the beginning of the pandemic using pre pandemic comps and stayed flat.  Mortgage brokers, Realtors, appraisers, buyers, and sellers proceeded as if things were normal and transactions continued.

In Pasco County, we saw strong demand from buyers including many getting away from the cities, the pandemic, and the protests. 

The pandemic has had a strong effect on supply, or should we say the lack of supply.  Homeowners who might have sold have chosen not to because they do not want to move during a pandemic.  They do not want to go through the selling process, they do not want strangers/buyers walking through their house. 

The governor has a moratorium on foreclosures and evictions.  This has been extended through July 31 and it is expected to be extended another month at least.  It is a good thing, because we will potentially have tens of thousands and more homeless people with nowhere to go, no job and no money. 

How imbalanced is the supply and demand for real estate in Pasco County?  For comparison over the last 10 years or so, Pasco has had around 4500 to 5000 residential properties available, of those we usually had 1000 or 1500 homes under contract meaning there were around 3000 homes to choose from.   Today, July 21,2020 there are less than 4000 homes, 2366 of them have a contract leaving under 1617 properties available.  Only 1100 of them are single family residences.

The net effect is that prices have been strong.  Who saw that coming?  What can we expect from here?

The narrative in the press regarding real estate has not given a clear picture.  Lawrence Yuen, chief economist for the Florida Realtor’s is predicting a 4 % rise in prices in Florida this year.  If supply stays this tight, he will probably be right.

The Federal government has pumped $2 trillion into the economy and it is expected that it will do more.  This combined with the moratorium has had a huge effect in helping avoid a stock and real estate collapse

Since February 7, there have only been a handful of foreclosures filed in Pasco County.   None of these have been mortgage foreclosures.   

Many of the homes that are in arrears have been given a furlough on making payments.  This means that these mortgages are not even on the list of future foreclosures.  These homeowners will be required to make up the arrears at some point.  If they cannot, they will be subject to foreclosure.  All of these mortgages have had the same time frame for furlough, and it stands to reason that they will all default in the same time and become foreclosures around the same time.

When the moratorium ends, the foreclosures will be trackable real time.  That means we will be able to monitor foreclosure filings within one hour of being submitted.    Each day we will count them.  Each week we will total them and each month they will be tabulated.

The narrative in the press will start to pick it up.    Have you noticed how the press focuses on unemployment numbers, seeming to be more sensational when they are bad?   This type of focus and press will be our future as the foreclosure bubble approaches.  

It can take 5 months and more for a foreclosure to become part of the supply chain.  So, this inventory is a long way off.  We will see pre foreclosures, short sales, and evictions first. 

What else can we expect? 

As the press reports the mounting foreclosure statistics, you can imagine the conversations.  “Honey, it looks like there will be a lot of foreclosures, maybe we should sell our house before they come.”

Buyers will suddenly be aware that the current inventory is going to expand.   The competition for homes will diminish as expectations of a large future inventory becomes prevalent.  

Suddenly, sellers will become concerned that their home may not sell.  As this concern mounts and the supply of real estate expands it is hard to imagine that prices will stay firm.

Should you sell your unnecessary real estate?   Do you have real estate that, if the market corrected 30-40% you will have wished you sold?

Call me Randy Jenkins and my team to discuss.

Randal Jenkins Bill Sanders Eric Jenkins   727-409-4663   www.409home.com

Coldwell Banker F I Grey and Son Res

Founded in 1924.

6330 US 19

New Port Richey Fl 34653

 

 

Jul 22, 2020 09:19 AM #55
Rainmaker
386,596
Dana Hollish Hill
Hollish Hill Group, KW Capital Properties - Bethesda, MD
REALTOR and Productivity Coach

Prices aren't going down, but appraisals are starting to come back low in the DC Metro Area.

Jul 22, 2020 10:16 AM #56
Rainmaker
545,595
Hella M. Rothwell, Broker/Realtor®
Carmel by the Sea, CA
Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea

There is no sign of that here on the Monterey Peninsula. Homes are going under contract in record numbers. Inventory is starting to tighten up.  But then we are a very desirable place for people who want to "escape" from the San Francisco Bay area and San Jose. Don't see prices coming down here any time soon.

Jul 22, 2020 11:08 AM #57
Rainmaker
2,953,338
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I don't think the prices have gone down at all in my area and I don't think they will as a result of this pandemic, only time will tell though.

Jul 22, 2020 12:56 PM #58
Rainer
239,960
Greg Mona
eXp Realty - Chandler, AZ
Professional Real Estate Representation for YOU!

Hi Beth Atalay. While we had a few hiccups in our market in March and April, listing prices never went down during that period, and have since gone up. Inventory is at a 15-year low, the median sales price in metro-Phoenix is its highest level ever, and mortgage interest rates are at a 50-year low. This all equates to a buying frenzy with over-asking offers and bidding wars on many homes. COVID hasn't done much to slow the demand down, at least here, anyway. And I feel your pain with the family member Realtor from another state! Good grief! ;-)

Jul 22, 2020 01:41 PM #59
Rainmaker
406,769
M.C. Dwyer
Century 21 Showcase REALTORs - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

What a well written and timely post, answering the main questions on many buyers' minds!    Thanks for sharing your years of experience, with helpful annecdotes.   And Congrats on getting your post in the Daily Feature E-mail!

Jul 22, 2020 03:52 PM #60
Rainmaker
1,606,498
Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Beth, our market has been under-supplied since August 2017. Because of that, good homes normally don't last a few days and most sell for full price or beyond. It seems crazy that we are three years into low inventory, but it has actually gotten worse rather than better.

Jul 24, 2020 11:01 AM #61
Rainmaker
963,057
Ginger Harper
Coldwell Banker Sea Coast Advantage - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

 

Our prices are holding at this point. The market has been remarkable.  Do not know when the bubble is going to pop.

 

Great post.

Jul 24, 2020 11:49 AM #62
Rainmaker
2,868,746
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

It really does depend on demand no matter where you are and people really don’t realize that it all depends on what the trends actually to the demand.

Jul 25, 2020 08:48 PM #63
Rainmaker
1,017,971
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Location, location, location!  Spot on advice.  Trust someone in that area to know the market vs. someone outside the area.  Great post!

Jul 27, 2020 07:21 PM #64
Rainmaker
3,485,871
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great day.  Stay safe.

Aug 10, 2020 01:28 AM #65
Rainmaker
247,402
John Henry, Florida Architect
John Henry Masterworks Design International, Inc. - Orlando, FL
Residential Architect, Luxury Custom Home Design

Hi Beth, I think that Florida is going to be a boom destination due to many medical and political factors.  Inventory is tightening up and I think we will see many more from the NE and other areas wanting to move here, especially Central Florida.

 

Aug 18, 2020 04:06 PM #66
Rainmaker
289,452
Shannon Jones
The Shannon Jones Team - Long Beach, CA
Long Beach CA Real Estate

So many people are getting priced out of Southern California right now and we don't see them coming down anytime soon.

Sep 11, 2020 03:42 PM #67
Rainmaker
286,334
Susan McCall - - Compass Realty Solutions
Compass Realty Solutions - Portland, OR
Listing and Buyer's Agent

Why do people (buyers) say they are waiting for prices to come down?  Can't they come up with a better excuse that this to remain renters?  I love questions?

Sep 20, 2020 09:51 AM #68
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Rainmaker
1,557,566

Beth Atalay

Cam Realty of Clermont FL
Sell or Buy Homes in Clermont FL
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