So Cal housing market rebounds from COVID-19

First half of 2020 flew by while we have been on the wild ride with pandemic. At the beginning of 2020, even with the trade war uncertainty, economists were anticipating strong economic growths. National Association of Realtors, N.A.R., and California Association of Realtors, C.A.R., were predicting an even stronger 2020 housing market with growing home prices. Then, COVID-19 wiped out all hopes and shut our economy down. We didn't know how the market would be impacted and how it would react to the crisis. We had no idea how the recovery would look like and how long the recovery would be. All kinds of opinions were flowing around. One number I heard many times was 10% home price discount. Now, in July, did this 10% home price discount happen?

Even though the real estate was deemed essential business during sheltering-in-place, were there any market activities? In March, the housing market was affected significantly. A great number of buyers and sellers retreated from the market. Some of those who were already in purchase agreement or listing agreement canceled their escrow or withdrew their listings. One escrow of mine was cancelled because of COVID-19. The sales decreased by around 50%, comparing to the same time last year. However, even at the height of COVID, people still felt it was a good time to buy. In comparison, fewer people thought it was a good time to sell. The demands was there. With more seller retreating from the marketing or withholding putting their homes on the market due to concerns for price deterioration, there continued to be more demand than supply. The home price in Southern California didn't see major decrease.

The bottom of the market was considered to be reached in May. We see more showing activities and more mortgage applications for purchasing. The number of mortgage applications for new purchase actually has been surpassing same time last year for weeks. Close to 30% of the buyers are willing to take risks to be exposed to corona virus if they can find the right home. I have showings with different client parties throughout the week since June. The pent-up demand is real, sellers! Of course this demand might slow down. Yet this moment presents a great opportunity to sellers. N.A.R predicts stronger recovery for housing market in the following few months and in 2021, 2022. There's still uncertainty especially after the recent surge of the COVID-19 cases in California. Meanwhile, interest rate continues to trend down and low interest actually allows buyers to afford more, even when the home price rises. So if you are thinking of buying, this is also an excellent time to enter market.

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