Home sales in Pasadena, and throughout the nation, are indicating an increasingly healthy real estate market after emerging from a standstill that accompanied the onset of the coronavirus pandemic in March, experts say.
Following a “great freezing” or “seizing up” of the market in April, during what is normally the busiest time of year in real estate, transactions are again picking up the pace, leading experts to conclude that this year’s home-selling season was not skipped, but merely delayed by a month or two.
“There’s a lot of good news out there. It’s an interesting phenomenon,” said Darrell Done of Coldwell Banker Residential Brokerage in Pasadena.
“If mid-April was the bottom, then we’re starting to see an upward growth from the end of April into May, and that growth continued into June,” he said.
“We’re now looking at a very healthy environment for the real estate market to continue to grow into the summer, and hopefully, into the fall. I think we have a great opportunity to see very nice business going into the fall,” Done said.
Buyers are encouraged by interest rates around, or even below, 3%, he said, according to Done and other experts.
“Buyers are out there looking, houses have started to come on the market in the past month to six weeks,” Done said. “We’re still seeing multiple offers, escrow in 8 to 10 day.”
“I don’t see any reason why we couldn’t expect to see this continue on,” he added.
While year-over-year home sale figures in Pasadena declined in May, they fell by significantly less than the available number of homes for sale did.
Pasadena saw 156 home listings in May, compared with 332 in May of 2019, Done said.
But while listings dropped by 53 percent, sales over the same period dropped by 35%, he said.
Once June sales figures become available, Done said he expects to see significant increases.
Prior to the outbreak of COVID-19, the market has started the year on a strong footing, he said.
“In the beginning of 2020, we actually entered into the new year with property values up about six percent from 2019, and transactions were actually quite good going into the new year,” Done said.
Figures released last week by Zillow showed that were selling in mid-June faster than at any point since Spring of 2018.
“Though many sellers have taken a wait-and-see approach through the pandemic, homes that have made it onto the market have been snatched up relatively quickly by eager buyers. In mid-June, the typical home sold in the U.S. had an offer accepted 22 days after it was listed for,” according to Zillow. “That’s as fast as homes have sold since early June 2018, when they typically sold in 21 days.”
The pace was even quicker in the Los Angeles-Orange County metropolitan area, the median number of days homes spent on the market in mid-June was 20, the Zillow Analysis shows. That’s eight days faster than the same period in last year, and 10 days faster than the prior month.
Zillow Economist Jeff Tucker said in very short order, houses will be “selling like hotcakes in the speediest market in recent memory.”
“The market did slow down in April, but anyone shopping this summer needs to be prepared to keep up with the lightning-quick pace of sales today,” he said. “The question is whether the tempo will slow after buyers finish playing catch-up from planned spring moves, or if this fast-paced market will stay hot thanks to continued low interest rates and buyers scrambling over record-low summer inventory.”
National data released by the National Association of Realtors on Monday showed a “record comeback” in May, according to the organization.
“Every major region recorded an increase in month-over-month pending home sales transactions, while the South also experienced a year-over-year increase in pending transactions,” The NAR said in a written statement.
The Pending Home Sales Index, “a forward-looking indicator of home sales based on contract signing,” increased by a record 44.3% to 99.6%, which was the largest month-over-month increase since the record was established in 2001, according to the NAR.
“This has been a spectacular recovery for contract signings, and goes to show the resiliency of American consumers and their evergreen desire for homeownership,” NAR Chief Economist Lawrence Yun said. “This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
But more work lies ahead, he said.
“More listings are continuously appearing as the economy reopens, helping with inventory choices,” according to Yun. “Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”