When the World Health Organization declared Covid-19 a global pandemic, the U.S. housing market came to halt. While that might be bad news for real estate agents and moving companies, it could spare the market the worst of this crisis. Here's how: barrons.com/articles/home-…
Excluding the Great Recession, there have been 1,039 instances of state recessions in a given month since 1997, according to Zillow—and home value appreciation occurred 81% of that time. barrons.com/articles/home-…
So far, home prices have held up: The median list price for houses for sale on Zillow at the end of April was actually 1% higher than it was the same time last year. barrons.com/articles/home-…
In an early April poll, 59% of National Association of Realtors members said buyers were delaying home purchases for a few months, and 90% said they had seen a drop in buyer interest. As of April 26, new Zillow listings were down 40% from a year ago. barrons.com/articles/home-…
With few buyers or sellers, the housing market is effectively in a timeout. Without transactions, there can be no price changes. “It’s not like there’s a pandemic discount,” says Edward Jones' Nela Richardson, who was previously chief economist at Redfin. barrons.com/articles/home-…
While much is still uncertain, it's unlikely we'll see a housing downturn like in 2007 and 2008. That's for a couple reasons: barrons.com/articles/home-…
“House prices aren’t overvalued like they were in the last crisis, because you don’t have the speculation, and you don’t have millions of adjustable-rate subprime loans,” says Mark Zandi of Moody's Analytics. barrons.com/articles/home-…
Sellers who don’t have to move, Zandi says, will likely pull their listings before they drop their prices. “They’re not going to transact until they feel like the coast is clear, which could be a year or two down the road,” he says. barrons.com/articles/home-…
And, unlike during the financial crisis that began in 2007, most homeowners can afford to wait it out. Heading into the current crisis, “mortgage credit quality was about as good as it ever gets,” Zandi says. barrons.com/articles/home-…
Plus, most owners have enough equity to sustain price declines. In other words, far fewer homeowners this time around risk being “underwater” on their mortgages, where their home values fall below the amount they still owe. barrons.com/articles/home-…
The government has also stepped in to help homeowners in a way it didn’t a decade ago. The Cares Act gives most the right to a forbearance on their mortgage payments for up to 180 days—and the option to extend that by an additional 180 days. barrons.com/articles/home-…
“It’s like flattening the curve. Forbearance is a very effective tool in slowing down the risk of the foreclosure spike,” says Todd Teta of Attom Data Solutions, which expects foreclosures to “slow to a trickle over the next six months.” barrons.com/articles/home-…
“I’m not going to tell you there is no risk of a downturn, but we don’t think this will look like the financial crisis,” says Jonathan Woloshin, head of U.S. real estate at UBS Global Wealth Management’s chief investment office. barrons.com/articles/home-…
Navigating real estate through the coming months and years will still be tricky. Barron’s spoke with economists, housing analysts, and real estate experts to learn what’s going on now—and what we can expect going forward. Read more: barrons.com/articles/home-…
