Different signs from May and June continue to support the claim by many experts that the real estate market is in a V-shaped recovery. The National Association of Realtors surveyed more than 4,000 real estate professionals about their monthly transactions in their May 2020 REALTORS® Confidence Index Survey and found that survey respondents saw roughly three offers each on homes closed in May, compared to about two offers in April and 2.3 in May 2019.
In-person home tours also saw an increase in May and 45% of survey respondents reported conducting virtual tours and showings. In April’s survey, 25% of respondents said they expected stronger buyer traffic on the horizon. In May’s survey, 43% said they expect stronger traffic in the next three months, indicating a significant shift in optimism in just a single month.
With a housing supply level falling short of demand, the survey respondents also expect home prices to remain stable or increase in all states except Hawaii over the next three months.
High Mortgage Volume
As reported in this CNBC article, home mortgage volume has surged for five consecutive weeks due to pent-up demand caused by shelter-in-place orders in March and April. The Mortgage Bankers Association reported on Wednesday that the volume of purchase mortgages was 18% higher than 2019.
Will The Housing Recovery Last?
Freddie Mac and the Down Payment Resource hosted a webinar “Economic Outlook and Housing Trends” on June 24 in which economists stated real estate market is protected from a downturn similar to the 2008 crisis because of the long-standing housing shortage and homeowners’ strong equity positions.
“Real estate demand has staged a remarkable comeback, and given the chronic supply shortage, the rebound in demand should provide support to home prices.”
– Sam Khater, Freddie Mac’s chief economist
There is some uncertainty, nonetheless, due to federal stimulus programs expiring in coming weeks. “Stimulus is flowing through and sustaining consumer spending and balance sheets for now, but there is concern that a fiscal cliff is just around the corner and may put the brake on recovery,” Khater said. Read more in “How Resilient Is The Housing Market”published in REALTOR® Magazine.
Luxury Real Estate Market Leads The Recovery
There are also signs of increased demand for second homes among luxury buyers. In terms of price growth and listing views online, the luxury housing market outpaced the rest of the real estate market, according to the Luxury Housing Report released by realtor.com on June 25.
“Demand for luxury homes reached new highs in May. After falling 9.5 percent year-over-year in April, searches for million-dollar homes grew 7.3 percent year-over-year, outpacing the 6.2 percent growth prior to the COVID-19 pandemic.”
Investors Are Optimistic
Investor resource, LendingHome, surveyed 600 investors across three investment segments: house flippers, landlords of single-family rental homes, and real estate investment mortgage brokers. Fifty-seven percent of investors rated positive feelings about real estate investing and eighty percent of the investors surveyed believe the impact of the pandemic on their business will be short.
“Every corner of the U.S. had a different view on things. But overall, within the next year or less, people expect to be fully back in business.”
– Matt Humphrey, co-founder and CEO of LendingHome