Real Estate – Time to Buy? Sell? Hold?
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May 21, 2020 by Elisabeth (Lil) Miller-Fox | Real Estate
As a lover of real estate and local investor, I’m watching the market closely to figure out how COVID-19 will impact home prices and sales.
Last week Lawrence Yun, chief economist for the National Association of Realtors, presented at the Residential Economic Issues & Trends Forum. Yun participates in many economic forecasting panels including the Harvard University Industrial Economist Council.
Here are three takeaways from Yun’s residential market update:
#1 Record Low Mortgage Rates = Peace of Mind
While home prices may seem high right now, low mortgage rates offer almost free money. Buying a home at rock bottom rates gives families peace of mind knowing that their monthly mortgage payment is manageable, fixed and will not change when inflation sets in.
#2 Home Prices Holding Up - Slight Declines in 2020
Yun notes “there is no meaningful downward trend (in home prices).” He forecasts a 0% to 2% price decline in 2020 before increasing 1% to 3% in 2021.
A recent Zillow study forecasts 2% to 3% drop in 2020 home prices before rising slightly in 2021.
#3 No Inflation Worries…. For Now
The largest stimulus package, economic rescue & tax breaks signal the government is all in. Yun says there’s “no concern over inflation which means the Federal Reserve can be accommodative for a long time.”
According to Yun, inflation will hit in 5 to 7 years and home prices will rise along with the price of everything else in our daily lives. “Everything will be rising, rising, rising,” says Yun.
