Market Observations Post-COVID
The last 2 months have been challenging in different ways for most people.
As an appraiser, I’ve had to navigate through the real estate market, analyzing the data in both a pre and post COVID market. In the beginning, it was too difficult to say what, if any, impact the virus would have. After 2 months of data, here are some of my observations.
Watch active listings and pending sales.
This tells us what the market is “currently” doing, while a sale is a historic event. A percentage of closed sales went into contract before the COVID crisis and may not have be an indicator of the future. Most data I ran for my assignments did not show any significant changes in prices overall when comparing pending sales/active listings vs. closed sales. Volume, days on market, etc. categories may have shown some changes.
Confirm if a low sales price is indeed the market or an anomaly.
I did observe a couple anomalies on purchases early on with some contract prices far below market trends.I spoke to the agents to determine why. One was due to seller who was honestly uncertain of the COVID impact on the market and wanted to sell asap to move on. Now if this became the norm and a majority of the comps were selling at this lower price range, that would suggest that the market adjusted and the new market range. But I didn’t observe that.
When looking at data from March until May 2020, don’t compare the data in this period to the data from the few months before (ex. Jan-Feb 2020). Go back and compare to the same period in 2019. Real Estate can be seasonal and seeing what impact COVID may have is best to look at the same period the year before especially during this spring period. Overall, many areas showed total volume down due to listings being placed on hold and/or withdrawn/cancelled, but was seemingly offset by a percentage of buyers seemingly sidelined due to shelter in place guidelines. If we have a shift with more listings and buyers remaining sidelined, then a shift in prices may be more likely.
Recently, pending sales are picking up.
Over the past month, I’ve seen many markets increase in pending sales. Some buyers may be bargain hunting and looking for a good deal. Other buyers or sellers have just been on the sidelines waiting and comfortable moving forward now. It will be interesting to see if the summer becomes a delayed spring market. This will be something to watch.
As we progress back to normalcy, we must remember that data can shift at any given time with a setback in the economy, COVID, and other external factors not yet known. There is a psychology factor as well. We are in new unprecedented times currently and going forward, some of our prior normal will be shifted. As real estate professionals, we have to be willing to adapt in this market.
Certified Real Estate Appraiser
What are we seeing?
The team is busy helping clients list and purchase homes. While we had a brief lull at the beginning of the Covid-19 shutdown, real estate activity has been robust for us, with new listings coming on market and buyers interested in finding homes in Western Nevada County.
Don’t hesitate to call us for evaluations of your home’s value or to tour homes on the market you have interest in.
We are here for you, and Alisa always answers her cell phone, 530-559-4871.
The Chart below shows Active and Pending listing in an upward trend. This is the MetroList MLS data that covers several counties contiguous to, and including Nevada County.
Prospector MLS Residential Statistics From March 18th to May 20th.
The MetroList team continues to monitor its systems and real estate data as our region, state and country begin to reopen. The latest Prospector MLS statistics are telling us the real estate market has started to rebound in the areas served by MetroList. As illustrated in the chart below, Active and Pending Residential Listings have begun to climb upward. These two indicators (Active and Pending) tends to bode well as showing guidelines have been developed to allow real estate brokers and agents to show properties. Click here to download the chart in PDF format.