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Fall in housing sales in the wake of coronavirus is expected to rebound in 2021

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Home sales are likely to plunge into the wake of the coronavirus pandemic this spring, but will rebound by the end of next year, according to new forecasts from property research site Zillow.

Zillow economists and analysts say sales are likely to drop by up to 60% as stay-at-home mandates and global economic worries reduce the vapor of what was once supposed to be a buying season of robust houses in spring.

But prices are likely to fall much slower and recover more quickly. Zillow predicts that prices will fall no more than 3% by the end of this year and then rise throughout 2021.

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Home sales are also expected to increase by about 10% per month until 2021, according to forecasts.

“A lot of uncertainty remains, especially with some states starting to reopen and experts warning of a possible second wave of coronavirus in the fall,” Svenja Gudell, chief economist at Zillow, said in a statement. “However, the fundamentals of housing are solid, much more than they led to the Great Recession, and this bodes well for housing in general. “

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Before measures to contain the coronavirus intensify in March, the home buying market should be strong, fueled by historically low interest rates, a limited number of properties for sale and the desire of young people Americans to buy their first home.

The pent-up demand remains despite current economic uncertainty, says Zillow, noting that the number of new registrations and pending sales is already increasing. And the real estate sector has adapted to a changing environment, using technology to enable transactions in a context of social distancing.

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This means that prices are barely going to move, unlike the Great Recession where house prices plunged nearly 25% and took five years to reach the levels seen before the slowdown.

“Despite the difficulties, we see several signs that there is still a good demand for housing and buyers, sellers and agents are progressing more and more comfortably to move transactions as far as possible,” said Gudell.

Follow Charisse Jones on Twitter @charissejones

Read or share this story: https://www.usatoday.com/story/money/2020/05/04/coronavirus-plunging-home-sales-should-rebound-2021/3072355001/

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