A decrease in foreclosures, forebearance in lending markets on the rise, and low inventory have made a huge dent in the housing market. Especially in big cities.
In April, inventory on the housing market was down 25% while demand was still at 100%. The unemployment rate is at an all-time high, and frankly, not many people are looking to buy a house. Homeownership rates are currently down ten percent since the great financial crisis and we are seeing that people with money are buying houses in force while the inventory remains low. Moreover, the pandemic is still an ongoing issue and will be for some time to come which will then most likely crash the housing market in a detrimental way. This will cause chaos and create a lot of panic buying and selling. Glenn Kelman, Redfin Ceo speaks talks about how one in four Americans are not going back to the office and are refusing to pay rent in large cities. Places like New York, San Francisco, and even Seattle are being trumped by Boise and Charleston. He spoke about how he came to this realization by sharing that Redfin's site traffic showed an upsurge in searches for homes in small towns coming from bigger cities. Virtualization had already caused many people to ditch living in the city and now this pandemic has only fed the ongoing trend to move "outside of town."
“I''m worried about the big cities, 1 in 4 Americans who are working from home for the first time say they aren't going back to the office and are not going to pay the rent to live in big cities such as New York, San Francisco, or even Seattle. We excpect something close to an exodus to places that are more affordable and where you can still walk around town.”
-Glenn Kelman, Redfin CEO
Is there an opportunity in all this chaos?
Potentially. People who have investment properties, and were used to paying off their mortgage through rentals on Airbnb are selling in great numbers because they cannot afford to keep them. Those that are buying these homes are bringing a form of liquidity to the market while also, most likely, getting a great deal on a home.