Whether the coronavirus pandemic causes a housing market crash or not, it will, at the very least, ruin the market’s best selling months.
ATTOM data solutions just released a report stating that late spring to early summer is the best time to sell a house. Unfortunately, much of the nation will either still be under stay-at-home orders or they’ll be trying to adjust to the realities post-lockdown life.
According to the study, warmer months bring higher premiums. Home sellers get an average premium boost of 8.3% above market value in May. Houses fetch a 9.6% higher premium in June.
Todd Teta, chief product officer with ATTOM Data Solutions, explains:
Since Summer is a time for vacations and outings, it’s no surprise that it’s also a time when people are most likely to move. Families start their home search when they know their kids will be out of school and when the weather is ideal for home viewing and moving, giving home sellers an upper hand in price negotiations.
Unfortunately, this summer could be drastically different.
Vacations and outings will likely be at an all-time low this year as coronavirus fears will keep more people close to home, even as lockdowns lift. Naturally, they probably won’t be looking to start their home search amidst the uncertainty of the ongoing pandemic.
The catastrophic unemployment rates are not helping the situation. Potential buyers who are still working will likely be wary of their job security until we have a better grip on the outlook of the economy. It’s hard to picture that happening before the summer ends.
Last year, Zillow named May 1st-15th the best time to sell a house. They reported that:
Homes sold in the first half of May sell six days faster and for $1,600 more than the average listing.
At a time when the housing market could desperately use a shot in the arm, it appears as though it will miss out on this fruitful period. That’s terrible news for a housing market that checks all four boxes that led to the 2008 housing crisis.
According to the National Association of Realtors’ (NAR), the pending home sales index crashed by nearly 21% this year. Actual contract signings in March plummeted 16.3% compared to last March.
There is some glimmer of hope on the horizon, though. Reports from the Mortgage Bankers Association point to a growing pent up demand for homes. Mortgage applications have increased for the third consecutive week.
Only time will tell how it all shakes out, but at the very least, we can’t expect summer to save the market.