Even though the housing market has been hot, trends have emerged that confirm that it is rapidly cooling.
Cracks Appearing: Trends have developed which demonstrate that the hot housing market is cooling due to the Coronavirus.
The Coronavirus has quickly evolved from bumping elbows and not holding hands at church to social distancing and a mandatory “stay at home” order from Governor Gavin Newsom for the entire state of California. Shopping malls have closed, schools have moved to electronic learning, restaurants now only allow take-out or delivery. Life as everybody knows it has been turned on its head.
Prior to the outbreak, Orange County housing was pumping on all cylinders. It was the hottest Spring Market since 2013. Multiple offers were the norm, home values were on the rise, and there simply were not enough homes on the market to satisfy the voracious appetite of buyers. The low mortgage rate environment with rates remaining in the 3’s was propelling housing upward.
Just as COVID-19 changed “business as usual” for everyone across the nation, trends have rapidly surfaced that highlight a cooling housing marketplace.
CRACK – Demand did an about face and dropped by 7% in the past two-weeks. In the past five years, demand, the number of pending sales over the prior 30-days, averaged a 5% increase at this time of the year. The unconventional drop is due to pending sales falling out of escrow and fewer new pending sales. Demand is still 2% higher than last year, 48 additional pending sales, but the gap is closing. Two weeks ago, demand was 14% higher, 311 additional pending sales. Expect demand to continue to drop until the number of new Coronavirus cases starts to diminish and the “stay at home” order has an end date.