Real Estate during COVID-19

Real Estate during COVID-19

May 01, 2020

The U.S. Census Bureau and the Department of Housing and Urban Development on April 16 reported that new home construction starts for single-family homes – like the ones provided by D.R. Horton and NVR's Ryan Homes -- were down 17.5% from February 2020. Let us put that 17.5% number into context.

The report is only referring to single-family homes. While this is the only number that may matter to home builders like D.R. Horton and NVR, it is not the only part of the housing market. While starts for new multi-family homes (like apartment complexes) with five or more units dropped 31.6%. That means overall housing starts fell by 22.6% from February to March. 

Real Estate agent Alex Kharchenko with Remax in Boca Raton, Fl says “The home market in South Florida is in a state of flux.  When the virus hit the nation, it caused buyers in the market to immediately freeze. We saw slight panic in sellers in the luxury market, they decreased their listing price to adjust." 

Despite the slowing of the market, however, Southwest Florida real estate representatives are starting to see signs that activity is on the upswing. "Sales are definitely down, but they've been improving over the last few weeks," said Phil Wood, CEO of Naples-based John R. Wood Properties. "The trend line seems to be going in the right direction, and we're seeing more activity now. So, we're optimistic that it will gradually keep going up over the next month or so and will eventually get back to some kind of normal level."

Kharchenko says "Just recently we have seen a shift and buyers are delighted because there are fewer of them competing for the same properties, mortgage rates are low, and they believe there is more wiggle room now for sellers to accept lower offers. 

Though there are fewer buyers in the market, inventory is still relatively low. I believe if mortgage rates stay low the housing market will strengthen. If rates increase, we are looking for a housing market crash."