If potential homebuyers are expecting or hoping for significant price reductions due to COVID-19, they currently appear to be bound for disappointment. The price of any good is determined by supply and demand, and luckily for sellers, the current data shows that homes should retain their value through the pandemic.
In real estate, a normal housing market has around 6-7 months of inventory. Anything over seven months is considered a buyer’s market, which drives prices down. Anything under six months indicates a seller’s market, which drives prices up.
The Current Housing Market
Going into March of this year, there was around a three-month supply of homes — very much a seller’s market. While buyer demand has decreased quite a bit throughout this ordeal, so has the number of homes on the market. A recent report shows we have ~3.4 months of inventory. This means homes should maintain their value during COVID-19.
Historical analysis also shows that pandemics are generally characterized by sharp recessions that recover quickly enough to provide little damage to home prices. While home-price appreciation is expected to decelerate from current levels in 2020, it should easily remain positive year-over-year.
This is good news for both buyers and sellers. If you’re looking to buy or sell an Ankeny home, contact us today!