Central Ohio Real Estate Update, February 2020
Okay, so if you haven't heard yet, there's a global pandemic that has sent shockwaves throughout the entire world. Businesses are closed, the stock market is down more than 30%, and super markets are sold out of toilet paper. Needless to say, the situation is quite sobering, and the next couple of weeks will be very telling with what's to come. So be safe out there, stay healthy, and know that CommonCents will still be operating normally (remotely, as always) over the next few weeks and months.
All that said, I'm here to talk about real estate. With everything happening, there's very little information out there on how all of this will impact the housing market. So what's really going on?
The good news is February was a great month for homeowners in Central Ohio. Comparing to February 2019, median sale prices increased by 10.7%, days on market dropped 8.5%, and inventory decreased by 9.9%. The market was actually on the up and up after a relatively stagnant Q4 in 2019.
Now this is where things get interesting. On February 26, the CDC announced the first case of COVID-19 in the United States, which triggered a series of events that culminated the entire market to come to a halt. While many Ohio home buyers and sellers are operating business as usual, albeit with extreme caution, we're starting to see some interesting trends on the coasts - specifically out of New York and San Francisco. In these areas, the real estate market has frozen up entirely. No open houses, little to no showings, and almost no new homes coming on the market. If the trend continues, I suspect we'll be in a similar situation in Ohio within a week or two.
If and when this happens, the real estate market will come to a halt - no new buyers and no new sellers, relatively speaking of course. However, this freeze likely won't last long, and as soon as it breaks, I anticipate a lot of pent up demand to hit the market afterwards. This, in my opinion, will be the best time to hit the market - the first to the market will win out.
So what are the long-term effects of COVID-19? This is nearly impossible to predict, but many economists anticipate some sort of recession for the next year or two. With a 30% drop in the stock market over the past month, people's savings have decreased significantly. Therefore there is less money available to buy homes. If the stock market rebounds, we're good, but if it stays down then this will certainly impact home prices. With all that said - in my personal opinion - I think the housing market is bound to take a slight turn for the worse in the coming months. The good news is we're not there yet, so if you're planning to sell in the near future, now may be your chance.
In addition, anyone buying a home this year is likely to reap the rewards of a buyers market in 2020, which is why CommonCents is excited to announce our brand new buyer rebate program in April 2020! More information to come soon.