Here is your March Real Estate Market Update for Louisville!
The spring real estate market is typically known for a large upswing in activity on both the buying and selling side of things. The conditions were set for spring to be an incredibly competitive housing market – low inventory, high demand, and low mortgage rates. However, with the COVID-19 Pandemic and current uncertainty of the economy, it is not surprising that uncertainty also appears to be reflecting in the real estate market. Although we ended March with some solid numbers, the Louisville market showed some steady deceleration during the weeks ending March 21 and March 28 compared to the first two weeks of the month. The average national listing price over those last weeks also increased at a slower rate of 3.3% and 2.5% annually, which is the slowest pace of growth dating back to 2013, according to realtor.com®
Although it is apparent that things are slowing, there has not been a lot of volatility in the real estate market yet. “The U.S. housing market had a good start to the year,” says Danielle Hale, realtor.com®’s chief economist. “Despite still-limited homes for sale, buyers were buying and builders were building. The pandemic and virus-fighting measures appear to be disrupting that initial momentum as both buyers and sellers adopt a more cautious posture.” Substantial changes have taken place in the way real estate business is conducted to protect all parties involved. Technology, along with guidance from our national and local Association of Realtors, has made it possible to proceed with transactions, continue to list properties, and show houses to serious buyers.
Zillow.com conducted a study of previous pandemics and concluded that while home sales declined dramatically during an outbreak, home prices stayed about the same or suffered only a slight decrease. This makes sense intuitively as it is harder for prices to change when transactions are few and far between. In summary, pandemics have historically simply put the housing market on pause. We are likely to see an immediate dip in values due to scarcity, rise in unemployment, and economic turbulence. Once the market and economy start turning back on, we should see continued growth in real estate simply because of the high demand.
My best advice for buyers and sellers entering into the market at this time is to be prepared. Talk to your realtor and make a plan. If you are seriously looking to buy, you will likely have less competition right now making your offer stronger than ever. If you are considering selling, now is the time to get your house ready to list in time for the market to pick back up in the next few months.
In terms of investing , as the stock market drops, investors often look for less volatile options to park their wealth. Although there is a lot of uncertainty regarding COVID-19 and the economy, even in full-blown recessions, the housing market tends to be incredibly durable. So while COVID-19 will undoubtedly have horrible widespread impacts across the board, when it comes to the real estate market, this could be a great opportunity to invest.
Whatever situation you are facing, I hope you are staying healthy at home! Please reach out to me with any questions regarding this March Real Estate Market Update. If you have questions regarding buying, selling, or investing, I would love the opportunity to chat with you. Feel free to call, text, or contact me below!