The National Association of Realtors reports that total existing-home sales dropped, nation wide, 8.5% in March. Despite the decline, home prices are still steady. The median existing-home price in March was $280,600, UP 8.0% from the same period in 2019. Total housing inventory at the end of March was down 10.2% from one year ago.

Many sellers had withdrawn their properties from the market, waiting to understand how the Covid-19 health crisis evolved, therefore limiting the choice for buyers. Some sellers, the ones who are not highly motivated, will simply change their mind about selling for now. The general expectation is that listings will hit the market again as uncertainty fades.

And that’s what is happening in New York: according to Urban Digs new listings surged 39% last week compared to the previous week with 82 new listings, still far from the 506 of the same period in 2019. A similar trend is present in the rental market as well: increase in listings but far below the historic averages. So, supply is coming back thanks to a renewed confidence in the market from sellers and landlords.

In a national survey, 74% of agents said their clients have not reduced listing prices to attract buyers, according to the NAR. There is also clearly no panic selling at this point.

Also demand (or number of active buyers) appears to be picking up.

This is NO Great Recession..

Comparing February 2020 to 2007. Today only 6.6% of home owners have less than 10% equity in their homes, in 2007 it was 14.5%. The average loan-to-value ratio is around 53% while it was about 62% in 2007. Almost 10% fewer homeowners have a mortgage nowadays.

Bottom line: there are plenty of motivated buyers and sellers out there. And we are finding creative ways to transact under these interim circumstances.

We can’t help but to remind to our investors Warren Buffett’s words: “be fearful when others are greedy and greedy when others are fearful”.