After a dip in residential selling activity over the first half of 2020 due to the COVID-19 pandemic, the market is rebounding nationally as economies open back up and mortgage interest rates fall to record lows. Home prices haven’t been hit to the same degree as other sectors of the economy – at least for now, says Zillow. “[There are] no bargains in sight as home prices show little impact from coronavirus,” they note.1
In a recent National Association of Realtors (NAR) survey, 89% of Realtors® said a share of their clients have either returned to the market or never delisted their property. Roughly one-quarter of respondents indicated that their sellers never left the market. Suburban and urban markets are more likely to have reported fewer sellers returning to the market compared to small and rural markets.2
ALBUQUERQUE: HOMES ARE SELLING FAST
The Greater Albuquerque Association of Realtors (GAAR) reports that as of the end of June 2020, the average detached home price was $280,158 – a 3.3% increase over one year prior. Overall, inventory of detached homes for sale in the area decreased by 55.2% over one year earlier, and the number of closed sales went up 1.2%.3
COVID-19 restrictions have made potential sellers hesitant to put their homes on the market, which greatly decreased inventory in the Albuquerque area, says HomeAdvantage® agent Valerie Almanzar of Your Casa Team. “That, combined with incredibly low interest rates for buyers, is contributing to a very fast-moving market in the Albuquerque area,” she notes, adding, “It will take time for the market to go back to ‘normal’ for the area. If conditions stay the same, we will continue to see a rise in home prices into 2021.”
Valerie adds, “We are seeing buyers – including many first-timers – getting more home for their money because the low interest rates give them more buying power. On a month-by-month basis, the average number of days a home is on the market continues to decline, and it is really clear to sellers if a home is overpriced. We are seeing homes get multiple offers, and due to the risk of appraisals not coming in, buyers are offering upfront to pay the difference if the home does not appraise at the selling price.”
Her best advice is to work with an experienced real estate agent and/or team. “There are a lot of people getting into real estate right now who do not necessarily know how to negotiate and protect their clients,” she cautions.
CALIFORNIA’S TRI-VALLEY: ON THE REBOUND
The California housing market rebounded in June with its largest month-to-month sales increase in nearly 40 years, although home sales statewide were still down 12.9% from the end of June 2019, according to the California Association of Realtors (CAR).4 “While the recent uptick in coronavirus cases suggests this momentum will not continue unabated, home buyer demand seems to be holding strong,” they say.
In the Tri-Valley area, the real estate market has made a dramatic recovery after steep year-over-year declines in March and April. Buyer demand soared in May and June, almost surpassing 2019 peak levels. Housing prices have risen accordingly, and the inventory of homes for sale remains significantly lower than 2019 on a year-over-year basis.
Claudia Colwell, a HomeAdvantage agent and associate serving the Tri-Valley community at J. Rockcliff Realtors, expects prices to go up in 2021, based on the lack of inventory and high demand. “Properties are receiving multiple offers in most cases, which translates to higher prices since pricing comes from past closed sales,” she says, “This translates to new properties in the same area as well; those with the same amenities are listing higher than or close to recent sales in the area. As usual, the law of supply and demand comes into play.”
She adds, “We are definitely seeing an increase in purchases – and refinancing – due to the historically low interest rates we have seen recently. There’s huge pent-up demand from buyers, but unfortunately, inventory is still very low in comparison to 2019 – about 50% fewer properties are listed. The number of days homes are on the market has increased in most areas, significantly for some – up to 60%. This is because homes that were listed in March, April and May were very difficult to show because of restrictions on showing properties. We could only show completely vacant properties, with no staging furniture.”
The amount of properties sold has decreased in most Tri-Valley markets, again due to lack of inventory. “The number of properties in contract increased tremendously in June and July, again due to the pent-up demand from early spring,” says Claudia. “Median prices have risen approximately 8% overall since 2019.”
She’s seeing more first-time buyers in the area, perhaps because a lot of people are working remotely and will continue to do so in the near-term, as well as some employers offering to let people work remotely in the future. “There is a huge opportunity for young buyers to move out of the more expensive parts of the Bay Area and purchase instead of rent,” she notes. “The ‘move-up’ market has really picked up, with families needing more space now that they are spending so much more time at home, and because office and classroom space may be needed,” she adds.
Claudia’s top advice to buyers and sellers is to be patient and stay informed, as the market can be challenging and the process can feel overwhelming.
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1 Zillow, July 15, 2020. https://www.zillow.com/research/median-sale-price-coronavirus-27516/ 2 NAR 2020 Market Recovery Survey, July 9, 2020. https://www.nar.realtor/research-and-statistics/research-reports/market-recovery-survey 3 GAAR June 2020 Market Statistics, July 10, 2020. https://www.gaar.com/market-statistics/monthly/june-2020-market-statistics 4 CAR California Coronavirus Weekly Recap newsletter, July 22, 2020. https://www.carcovidupdates.org/ 5 Bay Area Market Reports, July 2020. https://www.bayareamarketreports.com/trend/tri-valley-real-estate-market-report
