Virus Spreads to Housing
Coronavirus begins to affect housing market
Not surprising the coronavirus pandemic has begun to take its toll on the housing market.
The numbers are still skewed somewhat because the effects of the coronavirus didn’t really begin to take effect until mid-march.
“The relatively moderate sales decrease that occurred in March is only a prelude to what we’ll see in April and May because sales were still modestly strong during the first two weeks of March before stay-in-place orders were implemented throughout the state,” said C.A.R. President Jeanne Radsick of Bakersfield.
And March is also a strong time for home sales as the weather begins to improve and spring approaches. Figures showed the coronavirus really did have an effect on single-family home sales as the state realized an 11.5 percent decrease in sales from February.
That’s the first month-to-month decline in sales in the state since 2007. It’s also the first double digit loss in nine years.
Many counties, including Tulare County, still had an increase of sales in March. Tulare County actually had a huge increase as the number of home sales increased by 30.6 percent over February. But it looks like the coronavirus in the last two weeks of March had its effect as Tulare County home sales actually decreased by 14.1 percent as compared to March, 2019.
In the state, home sales were down by 6.1 percent from March 2019. There were 373,070 singlefamily homes sold in the state in March. There were 421.670 homes sold in the state in February.
Median home prices had yet to be affected by the coronavirus, but that’s likely to change as well. In the Central Valley, the median home price increased to $350,000, above $340,000 in February and $325,000 in March, 2019.
The median home price in Tulare County decreased slightly from $254,480 in February to $252,000 in March but was still above $230,000 in March 2019.
But CAR Senior Vice President and Chief Economist Leslie Appleton-young also stressed when it came to home prices, “While the median home price continued to record a strong gain in March, most, if not all, of the closed sales were negotiated in mid- to latefebruary prior to the COVID-19 outbreak. “Still, the fast deterioration of the economy, the steep decline of the financial market and record-setting job losses have not been factored into March’s closed
sales but will become obvious in coming months.”
And Radsick added pending sales is actually a better indicator of how the housing market is doing. She said pending sales dropped by 25 percent. “Pending sales, which is a better reflection of the current market conditions and consumer concerns about the coronavirus suggest the decline could extend beyond the next couple of months, depending on the duration of the pandemic and the lockdown,” Radsick said.
Another sign the effect of the coronavirus hasn’t totally hit the housing market yet is the amount of time an unsold home remains on the market. In Tulare County it was 20 days in March as opposed to 21 days in February, but 32 days in March 2019.
Another measure that hadn’t been affected yet by the coronavirus is the unsold inventory index which shows the number of months it would take to sell the supply of homes on the market at the current sales rate. In March it was 3.1 months in Tulare County as opposed to 4.1 months in February and 3.3 months in March 2019.
CAR conducted a poll this month and found only one in four found it a good time to sell a home, down 59 percent from a month ago.
CAR also reported those who are considering selling their home will wait, meaning fewer homes will be listed on the market. But those considering buying a home will also wait, which will cause a jump in the unsold inventory index, CAR also reported.
The sales to price ratio in the state in March 2020 was 100 percent, meaning sellers received the entire listed price. That figure was 98.5 percent in March 2019.
The 30-year, fixedmortgage rate was 3.45 percent in March, down from 4.27 percent in