The Market & Industry: COVID-19 suppresses spring home buying season

While home sales actually rose on an unadjusted basis in all California regions from February to March, the pandemic has suppressed the start of the spring homebuying season. March typically sees a larger uptick than was observed this year, causing existing home sales to fall on a seasonally adjusted basis by 11.5 percent. Thus far, the pandemic has had only a modest effect on home prices.

While statewide listings and pending sales are declining, the rates of decline have not been as steep as in weeks past. Southern California and the Central Valley even experienced their first increases in the number of new listings since C.A.R. began tracking daily data in early March, and the Bay Area has seen two consecutive weeks of increases.

National new housing starts tumbled by 23.3 percent in March, the biggest drop in nearly 40 years. In a survey from the National Association of Home Builders, 90 percent of respondents reported a slowdown in remodel inquiries and customers’ willingness to proceed with a remodel.

Even with sales and construction down, Zillow reported that page views on for-sale listings surged sharply after falling by as much as 19 percent in mid-March. By mid-April, web traffic for Los Angeles- and San Francisco-based listings was higher than it was the previous year.

For current homeowners, Fannie Mae and Freddie Mac have announced they will start buying some mortgages that are in forbearance. The Federal Housing Finance Agency (FHFA) confirmed that borrowers with Fannie Mae and Freddie Mac will not have to repay their missed payments in one lump sum. And Fannie Mae predicted the national mortgage rate could fall to 2.9 percent by 2021, an all-time low.

Meanwhile, real estate brokerages continue to explore ways to adapt to this new normal. Compass began cutting wages, Keller Williams franchises are reducing fees, and Engel & Völkers announced a new partnership with Matterport to provide all Americas-based agents with 3D tour technology.

Sources: C.A.R. Research & Economics, Los Angeles Times, CNBC, National Association of Home Builders, Zillow Research, Housing Wire, Federal Housing Finance Agency, REALTOR® Magazine, The Real Deal, Inman News