In a healthy start to the year, appreciation increased in January, climbing to a 3.9 percent gain year-over-year, according to the S&P CoreLogic/Case-Shiller Indices, released this week. Before the coronavirus significantly spread to the U.S., 14 of the 20 markets measured posted price raises:
Las Vegas, Nev.
Los Angeles, Calif.
New York, N.Y.
San Diego, Calif.
San Francisco, Calif.
According to S&P, the appreciation in January matched recent trends. Come February, however, changes could happen, as the coronavirus postpones some transactions.
“The trend of stable growth established in 2019 continued into the first month of the new year,” Craig J. Lazzara, of the S&P Dow Jones Indices, states. “As has been the case since mid-2019, after a long period of decelerating price increases, the National, 10-City, and 20-City Composites [of the Indices] all rose at a faster rate in January than they had done in December.
Lazzara cautioned, “It is important to bear in mind that today’s report covers real estate transactions closed during the month of January. The COVID-19 pandemic did not begin to take hold in the U.S. until late February, and thus whatever impact it will have on housing prices is not reflected in today’s data.”
Although the coronavirus’ effects on the market remain unknown, analysts are expecting less sales in the short term, but a boost in demand, eventually, when authorities lift restrictions.
“The Case-Shiller Indexes for January show a housing market with solid momentum prior to the COVID-19 pandemic,” explains Dr. Frank Nothaft, chief economist of CoreLogic. “Homebuyer demand was supported by low mortgage rates and rising income, leading to a further rise in home prices. The novel coronavirus has placed a cloud of the spring buying season, and home sales will likely be much lower than had previously been expected.”
“Home prices increased nearly every month in 2019 and continued to push upward in early 2020 with strong demand,” Bill Banfield, executive vice president of Capital Markets at Quicken Loans, states. “It’s yet to be seen how home prices will react through, and after, the current health crisis. I suspect once the stay-at-home orders are lifted, homebuyer demand will regain its footing, provided employment rebounds quickly.”
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Suzanne De Vita is RISMedia’s senior online editor. Email her your real estate news ideas at email@example.com.