Last May, the Brookings Institution wrote about the post-Covid19 recovery as having several possible shapes of recovery (Z-shaped, V-shaped, U-shaped, W-shaped, L-shaped, and even the Nike Swoosh) but here are four major financial institutions predictions for recovery (below image).
In a Realtor.com study- we have seen a similar V-Shape recovery, but recently there’s been a deceleration as potential sellers found it harder to list and show their home as wildfires spread through the West coast.
Housing Market Recovery Index Highlights – Week Ending September 12
California has shown that social distancing and economic resilience continue to be key factors driving local differences in the housing recovery. Per Realtor.com’s research, the spread of COVID-19 is closely linked to the housing slowdown, with markets with higher cases per capita more likely to see a bigger impact on supply and the pace of sales. The speed and sustainability of the reopening, and each market’s ability to contain COVID-19, are dictating the speed of recovery across the regions. Finally, resilient economies may have an edge in the housing recovery, and areas with strong job markets before COVID-19, especially those with thriving tech sectors (such as in the SF Bay Area), are seeing buyers and sellers reconnect faster than the rest of the country.
Below are the V-shaped curved found in the northern California communities. Notice the downward trend in Aug – Sept due to the numerous wildfires.
The higher the index value, the higher the level of recovery. The lower the index value, the lower the level of recovery.
Thank you to the brave California Fire Department for coordinating a fantastic job containing many of the fires in California, we applaud their heroic service as many sacrificed their time, energy away from their families to protect people and properties throughout California.
How is your family and how are you handling the aftermath of the fires? I hope you and your family are doing well, but just know that it has effected everyone. It’s been a very rough few weeks here in northern California and the housing market certainly has been effected by the enormity and tragedies around us. Be safe & let me know if there’s anything we can do to assist.
|Lynne Watanabe MacFarlane, MCDM, SRES | Realtor
PFAC Silicon Valley affiliate
Intero | A Berkshire Hathaway Affiliate
- Housing Demand – Growth in online search activity
- Home Price – Growth in asking prices
- Housing Supply – Growth of new listings
- Pace of Sales – Difference in time-on-market
The index then compares the current status “to the last week of January 2020 market trend, as a baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period. The higher a market’s index value, the higher its recovery and vice versa.”
The graph below charts the index by showing how the real estate market started out strong in early 2020, and then dropped dramatically at the beginning of March when the pandemic paused the economy. It also shows the strength of the recovery since the beginning of May.It’s clear to see that the housing market is showing promising signs of recovery from the deep economic cuts we experienced earlier this spring. As noted by Dean Mon, Chairman of the National Association of Home Builders (NAHB):
“As the nation reopens, housing is well-positioned to lead the economy forward.”
The data today indicates the housing market is already on the way up.
Staying connected to the housing market’s performance over the coming months will be essential, as we continue to evaluate exactly how the housing market is doing in this uncharted time ahead.