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Looking at the real estate data, prices haven't really dropped that much. 2020 started with a historically low inventory of houses for sale nationwide. During t
by twblalock 6y ago
Looking at the real estate data, prices haven't really dropped that much. 2020 started with a historically low inventory of houses for sale nationwide. During the virus lockdowns, both supply and demand dropped so prices remained relatively stable.
I don't think we are going to know the real impact on the housing market until the lockdowns end and people resume normal activities like buying and selling homes. Then we will see if the relationship between supply and demand shifts.
Personally, I think that if work from home continues for a large number of people, people who have families are going to want to get out of condos and apartments and into houses where they can have dedicated office space. I wouldn't be surprised if demand shifts away from places like San Francisco toward houses in the suburbs with 4 or more bedrooms.
- qqqwerty 6y agoThere are a few reasons why home prices will take a while to shake out (if they do at all). The CARES act mortgage forbearance is likely preventing any panic selling at the moment. And home owners have a few other tools at their disposal to delay selling like taking in sub-tenants, refinancing, etc.. So I imagine most people selling right now are doing it because they want to, not because they have to. And the real estate agents all have an incentive to keep prices high, so buyers are probably getting the usual 'this is a great time to buy' spiel. It took about 2 years for house prices to bottom in the 2008 recession. I think the big reason was that it took a while for the record number of foreclosures to work their way through the system. If we do see the housing market impacted due to COVID, I wouldn't be surprised if it took a similar amount of time. But I also think that a quick recovery could prevent or mitigate a downturn.