Just a couple weeks ago, $300,000 homes were still flying off the market and Charlotte’s top agents were closing on multi-million dollar deals. It was business as usual.
But as concerns over coronavirus (COVID-19) mount and self-quarantine becomes the norm, realtors feel certain inventory will drop, and so will pricing.
Heading into 2020 the average mortgage rate was right around 3.5 to 4.5 percent, allowing buyers to get more home for their money. With bigger buyer budgets, increased demand, and low inventory — down almost 24 percent from 2018 — home prices were relatively high.
But home prices could now drop as agents predict homeowners won’t be rushing to put their home on the market any time soon.
Charlotte native and Cottingham Chalk real estate agent Lisa Warren says that’s partly because people are pausing showings right now, and partly because of the layoffs and wage losses people are experiencing.
“For the hourly worker, all of a suddenly their hours are cut back. That’s definitely going to stop shopping,” she says. “Or if a couple is looking and one person is hourly, one person isn’t, that’s going to change their budget.”
But, Warren says, the low interest rates are a wild card.
“The few clients that have sold their homes and are looking may try harder to find something right now …” she says. “We want to take advantage of the historically low rates.”
Low rates and lower inventory would normally drive housing prices up, but the uncertainty coronavirus brings may depress them, Warren says.
“I think we’re going to see the buyer pool thin out for a bit, and I anticipate that to impact sales prices,” Nestlewood Realty agent Ken Riel explains. “Less demand will decrease the offers buyers are putting in front of sellers and likely cause lower sales prices.”
These are just guesses, though. We’re in uncharted territory, many agents say.
“There are no predictive analytics that we can apply to this situation,” says Valerie Mitchener, owner of HM Properties. “Looking at 9/11 and the 2008 crash — that’s what we’re benchmarking against. The good news is, this isn’t looking like the 2008 crash or Great Recession.”
Mitchener says, supply isn’t outpacing demand at the moment, which means the market will hold on much better than it has during past disruptions.