Real Estate and the Cornoavirus

Re: Coronavirus Real Estate Market Update 24 April 2020 - Update Number 2

 As I mentioned in my previous Update, transactions are still occurring during the Coronavirus Pandemic.  The frequency of Real Estate transactions has declined significantly.  Of note, real estate prices have not declined.  Rather than delve into an extensive analysis, and as I mentioned during my last update, I think it is prudent to avoid predictions but to focus on Data, real numbers.

 1.      Hence, let’s look at what the numbers derived from the Ventura County MLS for all of Ventura County from April 1 to April 23 2020 state:

A.     New Active Listings = 412

B.     Active Under Contracts = 198

C.    Pending = 342

D.   Closed = 389

2.      To form an analysis on the above numbers, let’s look at the numbers from last year (April 1 to April 23 2019) from the same time period:

A.    New Active Listings = 892

B.     Active Under Contracts = 513

C.    Pending = 585

D.   Closed = 548

As predicted, the volume and sheer number of closings are significantly less from the previous year.  The true indicator will be the month of May, as many of the closings in April of this year were deals consummated at the end of February and beginning of March before the world shut down.

Of course, the number one question that I receive from prospective homebuyers and home sellers: Are Real Estate prices declining or do you think that prices will decrease in the future?  Again, I think it’s important to look at actual data.  As of this writing, Real Estate prices have not declined but we have to remember that Real Estate is typically trails the economy is the asset is not liquid.  For example, using data from corelogic in the City of Camarillo, the mean average closed property in February of 2020 was $634,000 and in April 2020 it was $675,000.  However, it will be important keep tabs on the mean average going forward for closed properties particular in the late summer and early fall.  I will keep you updated.

What does all this mean? My take is, watch the numbers and avoid predictions.  If you need to sell, then sell. If you need to buy, then buy.  If you have no sense of urgency then by all means wait and see what happens.  One thing is certain there is less inventory and still a considerable amount of properties going into escrow as evidenced by the April activity, which on the surface bodes well for potential sellers.