Daily Archives: March 20, 2020

Forty-four Percent of Homebuyers and Sellers Think Home Prices Will Fall During Next Recession

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Amid stock market crash and coronavirus fears, just 32% of consumers expect home prices to increase, down from 56% in December

Seattle, WA – March 20, 2020 (PRNewswire) (NASDAQ: RDFN) — Nearly one-third of homebuyers and sellers expect home prices to increase when the next recession hits, according to Redfin (www.redfin.com), the technology-powered real estate brokerage. This is based on a series of Redfin consumer surveys, and the results are summarized in this report.

This marks a complete flip from just three months earlier, when 56% of those surveyed expected home prices to increase during the next recession. In December, 25% of surveyed homebuyers and sellers expected home prices in their area to decline during the next recession; as of March that number has jumped to 44%.

“It’s easy to become fearful when it feels like a recession is imminent, but it’s important to remember what has actually happened in past recessions,” said Redfin chief economist Daryl Fairweather. “Home prices declined substantially during the Great Recession, which started with a housing crash, but throughout the 2001 recession home prices actually rose due to a nascent housing bubble and a shift in investment dollars from the stock market into real estate. It’s perfectly reasonable to expect that a 2020 recession won’t stop home prices from rising, since the supply of homes for sale is so constricted and mortgage rates are at all-time lows.”

The biggest change in home price expectations came among those under age 45. Prior to the current economic slowdown, 62% of them expected home prices to increase during the next recession and just 21% expected prices to decline. As of March, the share of the younger age bracket that expects home prices to increase was cut in half to 31% while the share that expects home prices to decline more than doubled to 47%.

Given how much home prices decreased across nearly every part of the country during the 2007-2009 Great Recession, it was surprising in December that most people did not expect home prices to be negatively affected during a future recession. These expectations may have had an element of choice-supportive bias, or more people could have been attuned to the eight-month long 2001 recession, during which real home prices increased 4.4%.

“Even though it’s likely that home prices may be insulated during the next recession, it’s a good idea for every homeowner to have an emergency fund in place just in case their home loses value and their income declines simultaneously,” continued Fairweather. “Young homeowners who don’t yet have much in the way of savings or equity should especially be thinking through worst-case scenarios.”

To read the full report, including more survey results, please visit: https://www.redfin.com/blog/next-recession-coronavirus-home-prices-survey/

About Redfin
Redfin (www.redfin.com) is a technology-powered real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including theRedfin Estimate, the automated home-value estimate with the industry’s lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 90 major metro areas across the U.S. and Canada. The company has helped customers buy or sell homes worth more than $115 billion.

NAR Survey Finds Nearly Half of Realtors® Say Home Buyer Interest Has Decreased Due to the Coronavirus Outbreak

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Washington, D.C. – March 19, 2020 (nar.realtor) Nearly half of Realtors® – 48% – said home buyer interest has decreased due to the coronavirus outbreak, according to a new survey from the National Association of Realtors®. That percentage tripled from a week ago when it stood at 16%. Almost seven in 10 Realtors® – 69% – said there’s no change in the number of homes on the market due to the coronavirus outbreak, down from 87% a week ago.

“The decline in confidence related to the direction of the economy coupled with the unprecedented measures taken to combat the spread of COVID-19, including major social distancing efforts nationwide, are naturally bringing an abundance of caution among buyers and sellers,” said NAR Chief Economist Lawrence Yun. “With fewer listings in what’s already a housing shortage environment, home prices are likely to hold steady. The temporary softening of the real estate market will likely be followed by a strong rebound once the economic ‘quarantine’ is lifted, and it’s critical that supply is sufficient to meet pent-up demand.”

NAR’s latest Economic Pulse Flash Survey – conducted March 16-17, 2020 – asked members questions about how the coronavirus outbreak, including the significant declines in stock market values and mortgage interest rates, has impacted home buyer and seller interest and behavior as well as new commercial clients who want to lease and purchase property. With respect to the coronavirus, several highlights of the member survey include:

  • 45% of members said the stock market correction and lower mortgage rates roughly balanced out, noting no significant change in buyer behavior.
  • The majority of members, 61%, reported no change in sellers removing homes from the market, down from 81% a week ago.
  • Four in 10 members said home sellers have not changed how their home is viewed while it remains on the market. One week ago, nearly eight in 10 members – 77% – said the same.
  • More than half of commercial members, 54%, have seen a decline in leasing clients, up from 18% of commercial members last week.
  • Eighty-three percent of commercial buildings have changed practices, with the most common being offering more hand sanitizer, more frequent building cleanings, and increasing numbers of tenants working remotely.

View NAR’s Economic Pulse Flash Survey full report here: https://www.nar.realtor/research-and-statistics/research-reports/nar-flash-survey-economic-pulse.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.