Construction Down Across the Nation is Sure to Further the Housing Shortage
Now, in our fifth week of the shutdown, the United States housing market has continued to slow. Not only Real Estate transactions, but new units built. According to the federal government’s monthly new residential construction report issued Thursday, April 16.
In the past 10 years, since the recession, the economy has greatly expanded but the housing market never fully recovered. It has gradually, but not enough to meet demand. Since COVID-19 housing starts have dropped, 22% from February to March according to data jointly released by the U.S. Census Bureau and the Department of Urban Development. Housing starts are the number of new residential construction projects that begin during any particular month and are considered a key economic indicator. The decline of new construction projects are projected to continue as the shutdown moves forward.
Good news, starts in March of 2020 are still up a few percentage points compared to March in 2019. The pandemic hit the U.S. after having a strong January and February with home construction up all across the country. Leading in the NW at 31.9%, Midwest at 27.1%, and the south 18.9%. The strong first quarter has helped cushion the blow, but numbers are expected to continue to lower.
Portland Home Price Check-
COVID-19 has seemed to have little impact on home prices. Obviously, some people financially stricken will need to sell their homes faster, possibly taking a lower offer but it looks like this pandemic currently is affecting buyers and sellers evenly. There is a similar number of buyers still in the market as homes available so competition has held steady, leaving little impact on home prices, as of yet.
My guess, when the “stay at home restrictions” lift and the public regains confidence in our safety to function as a normal society again, or when people feel the real estate market is picking back up, there will be a surge of properties to hit the market and not as many buyers getting in. A guess. I think many people will get in the market to sell a property to make up for their financial losses, while many buyers who were going to purchase a home have to sit out due to their buying power being eviscerated. I do not think the number of investors getting into the market to pick up on cheaper properties will counterbalance the number of buyers that have left or sellers getting in.
For anyone looking to invest during this time, I would look at expired’s, or have me look into them for you. Homes that were on the market but did not sell and have come off. There are a lot of properties that did not get sold last year that were going to get listed this spring, but the owners have since held off. Right now there is not a ton on the market. Let me know and I can send you a list of expired properties and if there is anything that catches your eye, I can reach out to the owners and see if they still want to sell. For that matter, if there is ever a property, on or off the market that you would like to purchase, let me know. I’ll look into it!