Learn More About Coronavirus's Effect on Minnesota’s School Year & Real Estate Industry
Every seasoned real estate agent knows the ebb and flow of the seasonality of real estate and its effects on the industry’s home inventory and activity. What’s important about this change in seasonal activity is how it affects your market. Having a firm understanding of your community and your clientele that inhabit it will determine your success throughout the year.
We can all look at this upcoming school year and know there will be differences from years prior due to the coronavirus and its halt on our daily lives and economy. Current trends of the coronavirus puts Minnesota on track to reopen schools this fall. What we in the real estate industry need to focus on now is how to move forward and recover. Some members of the state’s real estate industry are skeptical of what we should do during such a black swan event.
“With workers facing unemployment and home buyers feeling anxious about the coronavirus, we were expecting much worse,” said Chris Galler, Chief Executive Officer of Minnesota REALTORS®.
It’s not crazy to be optimistic in these challenging times. Recently REALTOR.com released their June 2020 report that paints a picture of a fast recovery in the midst of this pandemic and a return to January 2020 growth.
Minnesota’s School Year Seasonal Effect
Pre-coronavirus, the U.S. residential housing market was strong, and in Minnesota the real estate housing market was poised to have a strong year. In years past, the summer season was the best time to buy and sell a home in Minnesota, and although the obstacle of coronavirus altered the path of the real estate market, Minnesota is looking to make a comeback.
In June, the Minnesota housing market pulled up from the steep declines seen in May. Closed sales in June declined only -8.1% year over year, showing some recovery from the -20% declines seen last April and May (-24.2% decline in new listings and -20.4% decline in home sales). The outlook in April and May was bleak, with homeowner activity taking a steep drop throughout these months.
What Does This Mean For the Minnesota Real Estate Market?
Minnesota’s real estate market is poised to make a comeback after a few rocky months while adapting to changes from coronavirus. Luckily, the home and condo inventory in Minnesota is higher than most states in the U.S. This coupled with record-setting low mortgage rates can give interested parties more confidence entering their search in the market.
Outside of just the state, the REALTOR.com Housing Market Recovery Index reached 101.0 nationwide for the week ending July 18, posting a 2.5 point increase over last week and bringing the index above the pre-COVID-19 recovery benchmark for the first time since March.
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