Agents are feeling optimistic heading into the summer market, and consumers will hopefully follow suit. As states reopen, and the housing industry remains a solid place for consumers to invest, recent data from Homesnap indicates that 2020 may finish stronger than expected.
Low inventory and resilient attitudes
The impact of the coronavirus on the real estate market has caused historically low home inventory numbers as social distancing makes showing and selling homes more difficult. However, the real estate market has proven to be resilient, with listings and closings persisting throughout the months of April and May, making agents optimistic about the health of their business.
Agent sentiment goes hand-in-hand with transaction volume
Since spring 2019, Homesnap has measured agents’ views about the health of their local market by asking them each month whether they are more optimistic, less optimistic or had no change in feeling compared to the month before. Agents across the country using the Homesnap Pro app are asked this question once per month, and roughly 40,000 agents submit a response.
Homesnap recently analyzed the results from its Agent Confidence Index as well as market data from February through May of 2020. This data is important to share to help those in the housing industry continue to gauge improving markets.
Agents who closed a higher volume of transactions over the last 12 months were the most optimistic about the market in April, while lower-volume agents felt the opposite. This data suggests that established agents are pushing forward with business, but part-time, hobbyist and newer agents may be having a harder time finding traction.
Agents with more than 20 buyer/seller transactions per year reported a 4.56 percent decrease in pessimism from March to April 2020, while agents with less than five buyer/seller transactions per year reported a 0.77 percent increase in pessimism over the same time period.
Inventory conversations that need to happen right now
Agent confidence is a key factor in driving consumer decisions about how to list, sell and buy in this new market. One would argue that if agents are feeling confident, they will be able to inspire confidence in their local market.
Listings are desperately needed across the country. Agents whose buyer and seller leads have gone cold can help coax them back to the market — either to keep looking or to sell their homes — through their expressions of confidence.
From April to May 2020, Homesnap reported a significant increase in listings brought to the market across all four regions of the United States. While there was a slight decrease in closings, as the market continues to reopen, Homesnap anticipates closings to rise as more listings are brought to the market and transactions are completed.
The Northeast saw the greatest increase in listings (70.71 percent) and greatest decrease in closings (9.4 percent). The Midwest saw the second largest increase in listings, at 37.05 percent, and the smallest drop in closings, at 3.6 percent. Listings in the West were up 26.84 percent, while closings were down 8.7 percent, and in the Southeast, listings went up 17.05 percent and closings dropped 5.2 percent.
Summer market into fall?
Will summer optimism lead to a strong fall market? If sentiment continues to align with cautious state openings, we could see a booming fall market if consumer confidence catches up to the demand for listings. As many consumers reevaluate their surroundings and financial situations, we could see more market behavior changes.
What are your predictions based on where you are currently? Are you feeling optimistic? Comment below and share what’s going on in your market.
By day, Rachael Hite helps agents develop their business. By night, she’s tweeting and blogging. Feel free to tweet her @rachaelhite.