When it comes to purchasing or listing real estate, during COVID may not seem like the best time to do so. However, this is the furthest from the truth. Our transactions now are about the same as before, with some minor adjustments made to the system. It has been five months since the pandemic broke out, but what can we expect the real estate world to look like going into the fall? Check out some predictions real estate experts are making for the fall market.

1. What Will Home Equity Look Like?

According to Todd Teta, chief product and technology officer at real estate data and solutions provider Attom Data, home equity levels will begin to drop as time goes on. More and more foreclosures will begin as the unemployment rate continues getting higher and higher. However, others feel that the home values may continue to increase as demand rises. Mark Fleming, chief economist at First American Financial Corporation, says that because “you can’t buy what’s not for sale, buyers will likely feel pressure to escalate their bids to win the ‘bidding war’ on homes that are for sale.”

2. Will Home Buying Demands Continue to Skyrocket?

The answer to this question is no and yes. For reasons explaining why increasing buyer demand may not continue is due to the fact that surges in buyer demand took off when the coronavirus started, which also happened to be in the spring when sales are usually at their highest. Some experts are saying that the demand will eventually cool down and go back to a normal pattern. However, Mark Fleming expects demand to remain high, saying “Our research shows that millennial demand for homeownership continues to gain strength, and is a strong demographic demand tailwind for the housing market.”

There was a large amount of millennials entering into the new home buying phase this year, which will continue the normal demand for homes on the market.

3. Will the Prices of Homes Continue to Rise?

Here is one thing to note when it comes to asking this question. If you do not know already, the rate of home mortgage lows is at an all time low right now. The first time a loan has had a rate of 2.8% in the last several decades. But what you need to know with this, is that as loan rates decrease, prices increase. According to Taylor Marr, lead economist at real estate brokerage Redfin, he believes that since the supply fell short, the prices will continue to grow at the same pace as they were before the pandemic hit. As of now, it is a hit or miss situation. Only time will tell based on how this pandemic plays out.

4. What is the Biggest Concern for the Fall of 2020?

This year took a crazy turn for the worst. As the coronavirus hit the world, it hit the real estate market in an unexpected way. Here’s what real estate professionals think will be the biggest concern for the fall.

“First and foremost is the health crisis. Addressing that is both good economic and good housing policy. After that, the problem that we had BC (Before Coronavirus) and will have AC (After Coronavirus) is a shortage of housing supply. We have to build more homes to meet the growing millennial demand.” - Mark Fleming

“The biggest risk to both the rental market and the owner-occupied market is a continued resurgence of viral infections, which would jeopardize state plans to reopen sectors of the economy, and complicate school starting in the fall. As emergency fiscal policies from the CARES Act expire, especially boosted unemployment benefits which are scheduled to end in July, American households could end up worse off than they were this spring. - Jeff Tucker,  economist at real estate listing website Zillow

“There are no signs of an imminent market crash. But the greatest fear is that the pandemic continues for months and months and then conditions spiral into a vicious cycle that tanks prices, sends foreclosures soaring upward and causes problems in the banking system, similar to what happened right before Great Recession hit in 2007. That's a worst-case scenario, but it is not out of the question.” - Todd Teta

Do you have any questions you would like answered about the real estate market going in to the fall? Shoot us an email and we’ll get back to you!