If you read my most recent Market Update, then you know we expected a brief slow down in real estate in April, but we were also confident that housing would hold strong, and that demand would still be there when the economy started to re-open. For the most part, that is exactly what happened. Because inventory for the most part did not enter the market in April, we certainly lost sales, but as the economy slowly reopened in May and June, we were extremely busy.
As we now close out the second quarter of the year, Dr. Lawrence Yun, chief economist for the National Association of Realtors, spoke with our NC Realtor Board in a webinar to discuss the current state of the real estate market specific to NC.
Dr. Yun gave an overview of the economy, and I wanted to highlight several points for you:
- The GDP fell five percent in April, but residential investment (home sales, building, remodeling) rose eighteen percent showing how incredibly strong housing was pre-pandemic.
- Interestingly enough, personal income rose twelve percent, due to the massive stimulus package. Savings rose thirty-three percent because there wasn’t anywhere to go to spend money.
- There is/was huge spending power to be released into the economy, but it may trickle in, as there is still some fear and buyers may want to hang on to those savings.
The housing market is already showing a V-shaped recovery, meaning: if you look at a graph it would show there was a sharp decline of pending home sales in April, but the line is already rising back up and quickly. We are also seeing more people applying for mortgages, the first step in the home buying process.
Dr. Yun spoke on inventory and building, stating that housing starts are still extremely low and that housing has been under-produced for multiple years. He believes we should, “dismiss the idea of price decline because we are nowhere near normal for housing production.” We will see this through Spring of 2021.
He predicted NC home sales prices to rise about 5% percent in 2021 as well as recovery of all the lost sales from 2020. Changes we will see due to the pandemic will be things such as larger homes and buyers moving further out to obtain those homes. Suburbs will see increased activity as the traffic into cities stays low with people working remotely from home.
North Carolina is a faster job-creating state than most states in the country, due to companies moving here. Job creation is occurring and jobs will come back more quickly in NC than the majority of the rest of the country. Expect to see folks moving here from the northeast or west coast but still keeping their jobs and working remotely.
As always, my team is here to guide and support you. If you’re considering buying or selling or have any questions, please feel free to reach out!
Thank you all again for your business and support.
Charlotte Photo by The 5 and 2 Project.