A survey of California Realtors taken over the weekend and data on the pandemic itself showed positive signs for recovery where the housing market remains a relative bright spot. However, there are several factors that show the effects of the recession continue to weigh heavily on the pace of the recovery, even in a brisk housing market.
Buyer demand, particularly here in California, remains vigorous. Mortgage applications nationwide are more than 20% above 2019 levels.
Requests for showings in California are more than 90% higher than they were at this time last year, despite COVID constraints. Buyers have adapted to the virtual process and are more comfortable moving forward to purchase even from afar.
Yet, even as California’s housing market and economy see signs of life, the challenges we face remain very much ongoing.
Recently released data on the second quarter shows the economy contracted by 32.9% — the largest quarterly decline in recorded history. In contrast, the U.S. economy shrank by less than 18% during the Great Recession of 2009.
Housing inventory will remain an obstacle for California’s recovery, especially amid such robust demand. New listings were down 6.8% last week and were essentially flat for the preceding three weeks.
And, with the number of COVID-19-related deaths in California still rising and the real estate market facing ongoing restrictions that make it challenging to list and sell homes, inventory is likely to remain depressed for the near term.
Thus, even as California continues to make progress, it is critical that we temper our optimism with realism.
Many Californians want to buy: their home is more important now than ever before given that people are spending so much time there; they have more flexibility with their housing decisions because many can now work from home; rates are low and have provided a significant boost to affordability.
The data suggests inventory is near record lows, homes are selling very quickly, and there is minimal evidence of discounting on the typical home.
Higher demand on top of existing low housing inventory is likely to result in a recovery that is much slower than we would have hoped for and one where not as many buyers will be able to get into home ownership as desired.
If you are thinking of selling, now is a good time to take action with the assistance of your Realtor, who can walk you through the safety guidelines and the latest virtual technologies for marketing and completing a sale.
Call your Realtor today if you are thinking of selling to find out your home value in today’s market. Contact the Santa Barbara Association of Realtors at sbaor.com for the virtual open house directory.
— Staci Caplan is the president of the Santa Barbara Association of Realtors. Contact her at email@example.com.