Even though the housing market has been hot, trends have emerged that confirm that it is rapidly cooling.
Cracks Appearing: Trends have developed which demonstrate that the hot housing market is cooling due to the Coronavirus.
The Coronavirus has quickly evolved from bumping elbows and not holding hands at church to social distancing and a mandatory “stay at home” order from Governor Gavin Newsom for the entire state of California. Shopping malls have closed, schools have moved to electronic learning, restaurants now only allow take-out or delivery. Life as everybody knows it has been turned on its head.
Prior to the outbreak, Orange County housing was pumping on all cylinders. It was the hottest Spring Market since 2013. Multiple offers were the norm, home values were on the rise, and there simply were not enough homes on the market to satisfy the voracious appetite of buyers. The low mortgage rate environment with rates remaining in the 3’s was propelling housing upward.
Just as COVID-19 changed “business as usual” for everyone across the nation, trends have rapidly surfaced that highlight a cooling housing marketplace.
Despite the emerging cracks in the housing market, housing is not going to plummet into the abyss and bring a wave of foreclosures and short sales similar to the Great Recession. This is not a housing induced slowdown. This is an unexpected downturn and the government and banks are going to make sure that homeowners remain in their homes. The bottom line: there will not be a wave of distressed sales.