Guest Writer: Lee Branscome, Corporate Services Manager
Allen Tate Relocation and Corporate Services
The market is positioned for steady recovery, price appreciation through 2021
While real estate was deemed an essential business for the past six weeks under North Carolina’s stay-at-home order, the industry had to be proactive and nimble, adjusting aspects of the buying and selling process to keep our clients and agents safe. Especially in these uncertain times, the home has been more important than ever. Shelter is an essential need, but our homes have become our safe havens, our sanctuaries, our offices, and our schools.
Residential real estate in Wake County had an extremely strong start this year. At the end of February (comparing year over year numbers), new listings were strong with a 6.5% increase, sales were extremely strong with an 18.9% increase and average prices were up 6%. The market was facing an extreme shortage of inventory with only 1.8 months of supply (overall market).
With the onset of COVID-19 in mid-March, the pace of the market slowed dramatically and quickly. Metrics trended downward each week. The trend continued through April, where the market saw large percentage decreases in all metrics analyzed. Showings were down 37%, houses listed were down 34%, pending listings were down 15% and withdrawn listings were up 49%. The buyers and sellers that remained in the market were motivated consumers with reasons including rental lease expirations, relocation, and legal/financial concerns.
The industry moved all its services virtual. Almost all these strategies and technologies were already being used regularly, but now they are required. We changed our process to virtual first, in person second. Buyers are now initially touring homes online and only visiting in person when they have narrowed down choices to the final two or three. Open houses became virtual and by appointment. All documents are managed digitally. Closing attorneys adjusted to provide curbside or parking lot closings. And the Wake County Register of Deeds office implemented fully digital processes. The mortgage world has been volatile during all the uncertainty, but interest rates are still extremely low, and products are still available for buyers with reasonable credit scores. As we have done many times before, we adjusted to serve our clients safely and professionally.
What do we see next for real estate? This market slowdown was caused by a health crisis, not by a foundational issue in the real estate market. While some buyers and sellers have delayed their plans to move, we believe there is significant pent-up demand. We will see an inventory increase followed by an increase of sales.
Allen Tate RealtorsⓇ are fully prepared to help our clients buy and sell safely and effectively. We expect the market to improve each month through the end of 2020 and continue the momentum into 2021. We also expect prices to increase as much as 3 percent, which is a good appreciation rate and indication of a fundamentally sound marketplace.
To learn more about Allen Tate’s services, you can visit their website here.