Sales of single-family homes have predictably declined in the first quarter of 2020, due in large part to the effects of Covid-19, but home prices have remained solid and are expected to rise in most markets across the country in the coming months.
Prices of Single Family Homes Up 8% Over Last Year
As prices of single-family homes increased in every region, the median existing price for all housing types reached $280,600 in March—which is up 8% over last year's median price of $259,700. This increase marks 97 consecutive months of year-over-year home price gains. What’s down in the housing market is inventory.
10.2% Dip in Housing Inventory is Keeping Home Values Strong
With many home sellers temporarily pausing or completely pulling their listings from the market due to Covid-19 concerns, total housing inventory at the end of Q1 2020 was 1.5 million units, which is down 10.2% from one year ago. This significant dip in inventory is keeping home prices strong, with many economists predicting prices will continue on their upward trajectory over the next several months.
Prices of Single Family Homes Will Likely Continue to Rise
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” said Lawrence Yun, chief economist at the National Association of Realtors (NAR). “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
House Flippers Finding Deals Off Market Poised to Profit
While listed properties are in higher demand, fix and flip investors who are finding distressed properties off-market, such as through probate, or divorce records, public auction, wholesaler networks, or other off-market sources, should find that they are bringing their renovated homes to a market in great need of inventory -- and this should prove beneficial to home buyers and help boost ROI for house flippers as well.