Unlike 2008 when inflated prices and reckless lending paved the way for the Great Recession, as we face COVID-19, housing’s fundamentals have never been better, along with record breaking jobs and economic expansion.  There will be challenges, but the housing market in Sarasota County is positioned to meet them.

On March 16^th things changed.  The Governor shut down schools and bars.  Over the next week dine-in restaurants, gyms and recreational businesses were shut down.  Finally, the last shoe dropped.  On April 1 the Governor issued a Stay-at-Home Order, effective April 3.  It changed everything.  If there was any doubt, it effectively shut down the economy, although the sale of real estate remained open, declared an “essential service”.

Normally, I would have reviewed stats for the entire month of March to see how home sales were trending in Sarasota County.  That won’t help us today.  March became a bifurcated month, a month of 2 distinct storylines, a break in time.  For Florida, March 16 is that break in time, when the Governor imposed the first shut down.  So, let’s compare the first 2 weeks of April 2020 (COVID-19 Era) to the first 2 weeks of March 2020 (Before COVID-19).  It won’t tell us the whole story, but it will tell us a lot.

Credit to Logan Mohtashami, a loan officer and fellow writer/blogger who has wittingly described the times we live in as “BC” (Before COVID-19) and “CE” (COVID-19 Era).  Looking forward to “AD” (After the Disease).

Before COVID-19 it was rare that you would find homes taken off the market or cancelled.  Accordingly, no surprise that now, in the early days of COVID-19, when fear and uncertainty is at its height, there is an unprecedented run of temporarily off the market, withdrawals and cancellations of listings.  Likewise, fear and uncertainty has wrought an expected reduction in new listings, closed sales, and pended sales (homes placed under contract).  Nevertheless, business is being done.  For the first 2 weeks in April, there have been 314 new listings, 390 closings, and 282 signed contracts.  Noteworthy, the sold homes held their value.  The average sold price was up 1% from the first 2 weeks in March, and 0.03% less than the median sold price – essentially neutral.

As to the ultimate direction of home prices, it all depends upon how long it will take to tame the spread of the virus, roll out the economy in stages, and  get people back to work.  If there is a pull back, the strength of the housing market going into this crisis will be the driver that leads the economy out of it.

We need to be guarded about putting too much weight on stats at this time.  We’ll know better by July.  Nevertheless, I think it fair to state that the housing market is neutral, trending towards a Buyer’s Market.  6 months of inventory of homes for sale is considered a balanced market. Closed and pended sales are generally weaker in the first half of the month, and stronger in the second half.  Sure enough,  inventory based on closed sales went up 27.9% for the first 2 weeks in April vs the same 2 weeks in March.  Further, pended sales went up 69.10% over that same period.  Based on the foregoing, I project the inventory of homes for sale based on closed sales (a lagging indicator) will be in the 5-month range; and, based on pended sales (a leading indicator) in the 8-month range.

My advice:  Do not make decisions out of a sense of urgency.  If you don’t need to sell or buy your home now, don’t.  If you need to sell or buy your home now, do it.  In the middle of instability, there is always opportunity. Inventory remains low.  CDC compliant in-person guidelines and virtual and digital mechanisms are in place to affect any sale, safely … from listings to showings, to inspections, financing and closings.