Even though COVID-19 has changed the way people buy and sell houses, the real estate market has remained quite resilient during this pandemic. People are using virtual tools to see homes remotely, and in-person showings are now mostly touch-free with social distancing.
Of course, home sales have declined from what they would have been because some people have postponed buying or selling because of COVID-19. Nevertheless, buyers continue to purchase homes throughout Utah. Even during April, which will likely have the most impact from the pandemic, Utah Realtors sold about 3,300 homes.
In fact, Northern Utah appears to be weathering the pandemic even better than the rest of Utah. April home sales actually increased 9% in Weber County and 25% in Morgan County. Sales fell 8% in Davis County, but that was much better than the 19% decline throughout Utah.
Home sales down, but prices to increase or stay the same
Many economists are predicting the pandemic’s impact on housing will be short-lived, provided the economy bounces back in the last half of the year.
They say the temporary real estate slowing this spring will lead to an overall decline in home sales this year. However, sales activity should pick up in the second half of the year as the economy opens up and low interest rates incentivize buyers.
Economists expect home prices to remain stable or rise slightly. That’s because there already was a housing shortage, which will likely continue even during the pandemic.
Below is a summary of their predictions for the U.S. and Utah:
Lawrence Yun with the National Association of Realtors: Prices to increase 0%-2% in 2020; home sales to decline 10%-15%; mortgage rates to average 3.1%.
Danielle Hale with Realtor.com: Home prices to increase 1.1% in 2020; existing sales to decline 15%; mortgage rates to average 3.2% but decrease to 2.9% by the end of the year.
Freddie Mac: 2020 home sales down 15%; home prices up 0.4%; mortgage rates to average 3.3%
Fannie Mae: 2020 existing home sales down 14.8%; median existing home prices up 2%; mortgage rates to average 3.2%.
Lawrence Yun with the National Association of Realtors: Prices to remain stable this year and increase 10% cumulatively in 2021 and 2022.
Jim Wood with the Kem C. Gardner Policy Institute: Little change in home prices; existing sales to decline 15%-20%.
Is local real estate activity returning?
Even though real estate activity was slower in April, there are many signs that local buyers and sellers are reemerging.
One of those signs is the fact that real estate showings on UtahRealEstate.com have now surpassed 2019 levels.
Showings started the year strong but tumbled in mid-March and early April as people stayed home because of the pandemic. Activity has since picked up, and now 2020 real estate showings are exceeding 2019 levels, as of May 17 data.
Another promising sign is the fact that the number of contracts signed to buy homes has also exceeded 2019 figures. After declining in mid-March and bottoming out in early April, the number of under-contract homes has steadily increased. As of May 16, buyers signed more than 600 additional purchase contracts compared to the same time in 2019, according to UtahRealEstate.com.
The current housing inventory is also supporting the economists’ assertion that prices will hold firm. The number of listings is down 18% from last year, exacerbating the existing inventory shortage.
Even though the real estate market isn’t immune from the challenges of the pandemic, there are many reasons to be confident in buying or selling a home in Utah — especially in Northern Utah.
To learn more about how the market is doing in your neighborhood, contact a local Realtor. Find a Northern Wasatch Realtor near you at NWAOR.com.