Significantly higher mortgage rates are preventing a massive number of homeowners from selling their homes, and the trend has only grown more problematic recently.
In August there were 30% fewer FOR-SALE signs than the average prior to COVID, more than 1,000 missing sellers.
On March 19, 2020, the Governor of California issued a “stay at home” order. Offices, small businesses, shop owners, and schools all closed their doors and headed home. Only essential workers, such as health care, emergency services, and food services, were able to leave their houses and head to work. Once congested freeways were empty. Outings were limited to a once per week trip to the local grocery store. As a result of the pandemic and the need to hunker down, in Orange County there were 49% fewer new FOR-SALES in April 2020 compared to the 3-year average prior to COVID (2017 to 2019), an astonishing 1,974 missing signs.
Eventually more homeowners placed their homes on the market. In fact, there were more homeowners who came on the market from July to December 2020 than the 3-year average. Seven of the twelve months were positive. Overall, in 2020, there were 6% fewer homeowners who came on the market for the year, 1,795 less.
Even after learning to continue to live life and go back to work amidst a pandemic, there still were more homeowners who hunkered down and refused to move. In 2021, there were 6% fewer FOR-SALE signs than the 3-year average, 2,311 less. Eleven out of the twelve months were negative compared to the average.
A lack of sellers due to the pandemic is understandable for 2020 and 2021. With vaccines and boosters, 90% of Americans today see COVID as a manageable problem (Axios-Ipsos, September 2022). Yet, far fewer homeowners are placing their homes on the market in 2022. This trend has persisted and became more severe over the past couple of months. Through August, there are 5,473 missing sellers in Orange County compared to the 3-year average prior to COVID, 19% less.
Excerpt taken from an article by Steven Thomas.