Pandemic or not, people still have to move. While it’s true that some are waiting until stay-at-home orders are lifted, not everyone has that option. Here’s what I’m seeing as I work with buyers and sellers during this unique time: the conditions should be great for sellers and yet buyers are coming out ahead. If you read that and find yourself scratching your head, welcome to the club. In a word, it comes down to fear - fear of the unknown.

Usually, real estate pricing is a reflection of market conditions, primarily supply and demand. Low supply typically helps sellers, but right now, many sellers who really need to sell are very concerned with how long buyers will sit on the sidelines. In turn, they’re willing to strike a deal with buyers. This is particularly true if the property has been on the market for more than a few months.

Now time for a BOLD PREDICTION: this leverage is likely to shift heavily to the advantage of sellers as soon as states begin to resume business operations. I’m not an economist, but I am a very active Realtor in the western suburbs of Chicago. And although no one has a crystal ball, here’s what we do know: interest rates are back to historic lows and rent rates are holding at a reasonably high level. All this means buying will be a more affordable option. Once buyers regain their confidence in the market, they will come out in force. In most markets, the inventory is quite low and that is likely to remain the case even when you add in those who have been patiently waiting for normalcy. If you’re a numbers person like me, then consider month’s supply. Month’s supply of inventory (MSI) = # months it would take to sell current inventory of homes listed for sale. A national, balanced MSI is around 6 months. In our local market, a balanced MSI is closer to 3-4 months. The ball is in the seller’s court when MSI is less than a balanced market. And MSI is trending down; we have an undersupply of homes for sale (see fig. 1). Once the demand kicks in, sellers are going to have more leverage and the market will start to appreciate, once again.

Fig. 1. Month’s Inventory of Homes for Sale, graph from Keeping Current Matters.

The real estate market is always changing and in times like these it’s crucial to work with a Realtor who’s full-time and engaged on a daily basis with buyers and sellers. In other words, just call me when your friends need a pro. If I’m not local to your market, I’ll find someone who works just like I do. In the meantime, I’ll be here controlling the controllables and keeping a beat on the market.

Yours to count on,

Jessica DeVries

Disclaimer: These are general trends and observations. Real estate is hyper local and every neighborhood is unique. Reach out to get specific trends for YOUR neighborhood.