This is the period when home sales are supposed to pick up. Indeed, summertime is the homebuying season. People move around the country for new economic opportunities; therefore, the housing market is supposed to boom. This is what it has been historically. However, it is not the case this year. Home sales have been dropping sharply. According to real estate company Redfin, the number of homes sold fell 25.5% year-over-year in April, and homes were on the market for bout 36 days on average, more than two weeks longer than the year before.
At a local level, a property that sits on the market for longer than the median length of time could signal to prospective homebuyers that there is something undesirable about the listing. When homes sell faster, it can also be a sign that any given market is less buyer-friendly. Currently, while home sales are on the decline, they nonetheless sell faster than expected.
A new report by Slacker lists Fayetteville, Jacksonville, and Wilmington as three cities in the state where homes are selling the fastest. In Fayetteville, 679 homes were sold in April, with the average sale price at $260,500. According to the report, homes were on the market for two weeks on average. In Wilmington, homes were on the market for the same amount of time, but less were sold; 459 homes were sold at an average home cost of $418,000. In Jacksonville, 415 homes were sold and homes were on the market for about 18 days. The average price was $260,000.
Barbara Corcoran, Shark Tank star and real estate tycoon, believes that home prices will surge again very soon. She suggests that prospective homebuyer shall jump on the opportunity to buy houses now because once interest rates drop, home prices will surge dramatically due to an explosive demand.
Indeed, Mrs. Cochran believes that there will be a massive swing in the real estate market as soon as interest rates drop. She stated:
“The minute those interest rates come down, all hell’s going to break loose and the prices are going to go through the roof. It’s going to be a signal for everybody to come back and buy like crazy and the housing prices will likely go up by 20%.”
Moreover, the real estate tycoon acknowledges that although the current conditions of the real estate market don’t look too good, we shall not expect a great recession-type of housing market crash as people aren’t overleveraged as they were in 2008.
Lastly, Mrs. Corcoran believes that commercial real estate will experience a slow recovery. She argues that people are still working from home and she does not see a turnaround anytime soon as the digitization of the job market continues to expand.